A dominated strategy
A) may be part of a Nash equilibrium.
B) is never played.
C) can be a best response.
D) is always part of a mixed-strategy Nash equilibrium.
B
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Monetarists suggest doing which of the following?
A) Maintain a steady growth rate of the money supply. B) Use fiscal policy to combat unemployment in the short run. C) Use monetary policy to combat unemployment in the long run. D) Use fiscal policy to combat inflation in the long run.
Suppose nominal interest rates in the U.S. rise from 4.6% to 5% and decline in Britain from 6% to 5.5%, while U.S. consumer inflation remains unchanged at 1.9% and British inflation declines from 4% to 3%. In addition suppose, real growth in the U.S. is
forecasted for next year at 4% and in Britain real growth is forecasted at 5%. Finally, suppose producer price inflation in the U.S. is declining from 2% to 1% while in Britain producer price inflation is rising from 2% to 3.2%. Explain what effect each of these factors would have on the long-term trend exchange rate ( per $) and why?
In the long run,
a. output, once determined, cannot be changed b. price, once determined, cannot be changed c. land and capital cannot be changed d. all inputs are variable, that is, the quantities of all inputs can be changed e. labor can be changed, but all other inputs are fixed
A sudden change in the normal behavior of inflation, unrelated to the nation's output gap, is called:
A. inflation inertia. B. long-run equilibrium. C. an inflation shock. D. short-run equilibrium.