According to New Keynesians, a reduction in which of the following will tend to cause the inflation rate to decrease?
A) anticipated future inflation
B) firms' average inflation adjusted per-unit costs of production
C) an unexpected reduction in aggregate demand
D) all of the above
Answer: D) all of the above
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Suppose that, in a sequential game, the first player chooses the strategy with the highest payoff, taking into account an optimal response from the second player. The outcome that results is
a. a Nash equilibrium. b. Pareto optimal. c. a Prisoners' Dilemma. d. a Stackelberg equilibrium.
We would expect the cross-price elasticity of demand between Pepsi and Coke to be
A. negative, indicating substitute goods. B. positive, indicating substitute goods. C. positive, indicating secondary goods. D. positive, indicating general goods.
The net economic gains from free trade are usually negative.
Answer the following statement true (T) or false (F)
Key features of so-called "nudges" include the following, except:
A. They are subtle B. They induce changes in behavior without bullying or coercion C. They involve significant monetary incentives D. They do not require stringent rules