What is a sequential game? How are decision trees used to analyze sequential games?
What will be an ideal response?
In a sequential game one player (firm) acts first, and then other players respond. A decision tree allows players to map out how the other player(s) will respond to their actions, finding the action that yields the highest payoff.
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In the IS equation, which of the following is an endogenous variable?
A) autonomous investment B) autonomous net exports C) taxes D) all of the above E) none of the above
When numerous Japanese companies buy $100,000,000 worth of goods or services from U.S. producers, ceteris paribus, there will be
A) appreciation in the value of the yen against the dollar. B) depreciation in the value of the yen against the dollar. C) depreciation of the dollar against the yen. D) no change in values of the currencies.
The Fed's countercyclical policy during expansion and prosperity includes:
a. raising the required reserve ratio, raising the discount rate, and selling government bonds on the open market. b. raising the required reserve ratio, raising the discount rate, and buying government bonds on the open market. c. raising the required reserve ratio, cutting the discount rate, and selling government bonds on the open market. d. raising the required reserve ratio, cutting the discount rate, and buying government bonds on the open market. e. lowering the required reserve ratio, cutting discount rates, and buying government bonds on the open market.
Which of the following is a valid criticism of unregulated monopoly?
a. Monopoly limits the options available to consumers. b. Relative to a competitive market, a monopolist generally will produce too great an output. c. Profit-maximizing monopolists will fail to produce at the lowest possible cost. d. A monopoly's output will often be more than if the market were competitive.