The dominant-strategy solution implies that each firm
a. ignores the reactions of competitors
b. colludes with competitors to maximize industry profits
c. ignores the decisions of the other firms
d. takes all potential bits of information into consideration before making a decision
e. selects the optimal solution to a game
C
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Suppose the required reserve ratio is 10 percent, but banks choose to hold an additional 15 percent of demand deposits as excess reserves. Under these conditions, the demand deposit multiplier will be
a. 0 b. 4 c. 5 d. 6.67 e. 10
In Keynesian economics the expenditure multiplier suggests that a change in spending causes a(n) _______________ change in GDP.
a. equal b. lesser c. greater d. minor
Cartels provide uniform management, but none of the advantages of economies of scale.
Answer the following statement true (T) or false (F)
Answer the following questions:
a. What is the difference between gross domestic product and gross national product? b. Give an example of a transaction that would be counted in GDP but not in GNP. c. Give an example of a transaction that would be counted in GNP but not GDP.