A dominant strategy exists if:
A. both players have the highest payoff when they make the same choice.
B. a player has a strategy that yields the highest payoff regardless of the other player's choice.
C. both players make the same choice.
D. one strategy yields the highest possible payoff.
Answer: B
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In a noncooperative pegged situation, when the home country devalues in response to an external shock the:
A) foreign nation will also devalue, endangering the peg. B) home country suffers the entire burden. C) resulting depreciation causes a large shift in demand from the foreign nation to the home country, thereby exporting the recession to the foreign nation. D) nations agree to switch their peg to the U.S. dollar.
Inefficiency is a flaw of a command economy because there is less incentive for resources to flow to their highest-valued uses
a. True b. False