In a Nash equilibrium:
A. the strategy played by an individual depends upon the strategy played by other players
B. the strategy played by each individual is a best response to the strategies played by everyone else
C. there is no incentive for any player to deviate
D. All of these are correct.
D. All of these are correct.
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Assuming the price level has not changed, how would an increase in the aggregate demand affect real GDP?
A) It only changes with changes in exports. B) It increases. C) It only changes with changes in imports. D) It decreases.
If a nation opens up to free trade and becomes an importer of goods, which of the following is then true?
A) The nation as a whole loses. B) Sellers gain. C) Buyers gain. D) Buyers lose.
Two cities A&B are deciding upon joint pollution laws. Right now they both face identical prices for their housing. If they decide that city A is to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville", in the long run, we expect to see
a. Asthmatics moving to Smogville b. Poorer families moving to Cleantown c. Residents in both the cities relocating based on their tolerance for pollution d. Residents in both the cities being worse off
Economists are sharply divided over how to best fight the Great Recession. A vocal minority of economists favor the "Structural Solution," arguing that the economy needs to undergo some structural adjustments and
A. Relying on the invisible hand of the market to reallocate resources, by letting weak firms die out quickly B. Government taking serious actions to increase the total demand for output in the economy C. Fixing prices so that consumers can afford the basic stuff they need, and also to control inflation D. Setting up social programs and welfare structures, to help out those who are suffering most from the recession