The game in Scenario 13.14
A) is Stackelberg if both players move at the same time; Cournot if one player moves first.
B) is Cournot if both players move at the same time; Stackelberg if one player moves first.
C) Stackelberg no matter what the timing of moves.
D) Cournot no matter what the timing of moves.
E) is neither Stackelberg nor Cournot.
B
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Gretchen expects the price level to rise from 104 this year to 108 next year, and she is able to incorporate these expectations into her wage contract. If the price level rises to 106 next year instead of 108, which of the following will occur?
A) Gretchen's real wage will be unchanged. B) Gretchen's real wage may rise or fall, depending on the unemployment rate. C) Gretchen's real wage will fall. D) Gretchen's real wage will rise.
If the interest rate is 25%, but cash flows change such that the investment renders a cash flow of $500 in year 1 and $800 in year 2 instead of year 3, would the investment take place?
a. Yes since NPV>0 b. No since NPV<0 c. Yes since the present value of the cash flows is greater than zero d. No since the present value of the cash flows is lesser than zero