Game theory may be used to solve problems of interdependent decision making by large firms
a. True
b. False
Indicate whether the statement is true or false
True
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In economics, the term "free market" refers to a market where no sales tax is imposed on products sold
Indicate whether the statement is true or false
With perfect price discrimination, each consumer is charged the marginal value of each unit consumed
a. True b. False
Assume that the professors at a local college have gone without a pay increase for 4 years during a tough time. Suppose that things start to look up and the President of the college wants to make up for lost time. If the CPI in 2002 was 150 and 175 in 2006, how much will salaries have to increase to bring the faculty back up to their real income from 2002?
a. 175.0% b. 150.0% c. 25.0% d. 16.7% e. 14.3%
Suppose the real money demand function isMd/P = 2400 + 0.2Y - 10,000 (r + ?e).Assume M = 4000, P = 2.0, ?e = .03, and Y = 5000. The real interest rate that clears the asset market is
A. 6%. B. 11%. C. 3%. D. 14%.