What is meant by strategic behavior?
What will be an ideal response?
Strategic behavior is when someone considers how their behavior affects the behavior of others and acts accordingly.
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A video available on a Web site that allows free download is a ________
A) private good B) public good C) club good D) common pool resource
Herd behavior can best be described as
A) the large number of investors involved in the stock market. B) how large participation in financial markets increase market efficiency. C) informed investors can outperform relatively uninformed investors. D) relatively uninformed investors follow the behavior of other investors instead of consider fundamentals.
The Fed changes the reserve requirement sparingly because:
A. very small changes cause very large overall changes to money supply due to the money multiplier. B. it would cause uncertainty for banks and slow their rate of lending. C. sudden changes of such a huge magnitude would have far-reaching, and sometimes undesirable, effects. D. All of these are true.
The Social Security tax is an example of an automatic stabilizer
Indicate whether the statement is true or false