Commitment devices are necessary when:
A. following through on a threat or promise is not in a player's best interest.
B. people cannot correctly identify their dominant strategy.
C. players cannot trust that other players will avoid playing a dominated strategy.
D. commitments cannot be purchased.
Answer: A
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As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,
A) the M2 money multiplier has fallen from about 9 to about 4. B) the M2 money multiplier more than doubled. C) the monetary base decreased by 50 percent. D) the ratio of currency to M2 deposits more than doubled. E) the reserve requirement ratio increased.
Ways to "game" the budgeting process include
a. accelerating sales if just short of a target b. accelerating expenses if just short of a target c. accelerating sales once a target is met d. delaying expenses costs once a target is met
Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such a setback will be accounted as the merchant's:
a. sunk cost. b. deadweight loss. c. marginal cost. d. opportunity cost.
Which of the following is a widely-used and closely-watched forecasting tool concerning the future direction of the macro-economy?
a. the excess reserves of commercial banks b. the Phillips curve c. the index of leading indicators d. the current budget deficit or surplus e. the velocity of the M1 money supply