Which of the following best describes a Nash equilibrium?
A. An outcome from which one or both competitors can improve their position by adopting an
alternative strategy.
B. The unstable outcome of a repeated game.
C. An outcome that is stable only because of credible threats.
D. An outcome that both competitors see as optimal, given the strategy of their rival.
Answer: D
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When prices rise, consumers and businesses hold larger money balances. This reduces the supply of loanable funds, increases the interest rate, and discourages both consumption and investment. This process is called the:
a. interest-rate effect. b. real balance effect. c. investment effect. d. disinvestment effect.
Figure 34-7
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In Figure 34-7, AB represents the production possibilities of Pestoland and CD that of Pastaland. The graph indicates Pestoland has an absolute
A. advantage in both pesto and pasta. B. and comparative advantage in both pesto and pasta. C. advantage in both goods, but a comparative advantage only in pesto. D. advantage in pesto only and a comparative advantage only in pasta.
The participation rate in the United States in 2010 was approximately equal to
A) 96%. B) 90%. C) 65%. D) 26%. E) 5%.
The exchange rate value of a foreign currency is ________ in the short run by a rise in its expected future spot exchange rate value.
A. not affected B. lowered C. made volatile D. raised