When both players in a game play a dominant strategy, the outcome will be
a. Pareto optimal.
b. a Prisoners' Dilemma.
c. a Stackelberg equilibrium.
d. the game's only Nash equilibrium.
d. the game's only Nash equilibrium.
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If reckless drivers are more likely than safe drivers to buy automobile insurance, then a moral hazard problem has occurred
Indicate whether the statement is true or false
Why is the credibility of the Fed's policy announcements particularly important?
What will be an ideal response?
The Keynesian economists do not believe that a cut in the marginal income tax rate will have strong effects on aggregate supply because they
a. do not believe that business investment will respond strongly to changes in the after-tax rate of return to capital. b. do not believe that labor supply will respond strongly to changes in the after-tax real wage. c. do not believe that labor demand will respond strongly to a change in the after-tax real wage. d. believe monetary policy will be too restrictive to allow strong output growth.
One reason why we might want to impose restrictions on free trade is to protect infant domestic industry in the formative stages of development and thus unable to compete yet on world markets
a. True b. False Indicate whether the statement is true or false