What is a "payoff matrix"?
What will be an ideal response?
A tabular presentation of various outcomes to each player, in a two-player situation, based on the various simultaneous decisions made by the players.
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Let's assume that two countries have imposed high tariffs on each other's products and services to the point where all trade between the two countries has disappeared
Assume a newly elected member of parliament in one of the countries makes a proposal for unilateral tariff reduction regardless of whether the other country wishes to follow suit. Explain why such a policy change would actually be a good idea.
The value of the absolute price elasticity of demand for good X is 3. The absolute price elasticity for good Y is 2. Which good's quantity demanded is less responsive to a change in price?
A) Good X B) Good Y C) They are equally responsive. D) Not enough information is given.
When the government raises spending to promote economic growth, the Fed sells government bonds on the open market. This implies that the Federal Reserve and the federal government are following different policy goals
a. True b. False Indicate whether the statement is true or false