What are the differences among positive-sum, negative-sum, and zero-sum games?
What will be an ideal response?
A positive-sum game is a game in which the sum of the outcomes derived from the strategic decisions of two firms is positive. For example, a positive-sum game will result in positive combined profits for two companies deciding and executing their best price strategies. Notice that a positive-sum game is concerned with the combined outcomes, making it possible for one of the firms to actually incur losses. In contrast, a zero-sum game is one where the net gain is zero because the loss of one firm equals the gains of the other firm. Finally, a negative-sum game is a strategic game where the sum of the firms’ outcomes is negative. Notice again that a negative-sum game is concerned with the combined outcomes, making it possible for one of the firms to actually incur gains.
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If net exports decrease by $10 billion and the MPC is 0.9, what is the ultimate change in GDP?
a. $100 billion b. -$10 billion c. $10 billion d. -$100 billion e. -$9 billion
If a bank advertises 3 percent interest for a checking account and the anticipated rate of inflation is 3.5 percent
A. the real rate of interest earned on the account is 3.25 percent. B. the real rate of interest earned on the account is 0.5 percent. C. the real rate of interest earned on the account is 6.5 percent. D. the real rate of interest earned on the account is -0.5 percent.