How do we arrive at a Nash equilibrium in a matrix game?
What will be an ideal response?
The key to finding Nash equilibrium in a matrix game is to follow the logic of finding best responses. Once the best response of each player to the strategies of the other player is determined, we need to check if either player has an incentive to change his or her strategy. If each player follows his best responses to the strategies of other players, none of them will have an incentive to change their strategies and thus Nash equilibrium will be reached.
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What is the NAIRU?
A) the nongovernmental agency of inflationary rate unions B) the new accrual index of real unemployment C) the nonaccelerating inflation rate of unemployment D) the natural accelerating inflation rate of unemployment
Which of the following is not a necessary condition for a flat BP curve?
A) perfect capital mobility B) perfect asset substitutability C) fixed exchange rates D) floating exchanges rates E) Both C and D
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the actual inflation rate turned out to be 3.2%, then the real interest rate equals
A) 1.7%. B) 3.2%. C) 3.3%. D) 4.7%.