Banks create money when they make loans

The Danish currency, the krone, is pegged to the euro at a rate of 7.46 kroner (kroner is the plural of krone) to the euro. At the pegged exchange rate, how many euros would be exchanged for one krone?

A) 0.07 B) 0.13 C) 1.76 D) 7.46

Economic agents (for example, consumers or firms) often do things that at first glance seem to be inconsistent with their self-interest

People tip at restaurants and when they are on vacation even if they have no intention to return to the same place. Firms, sometimes, install costly pollution abatement equipment voluntarily. How can these deviations from Nash predictions be explained?