Many economists believe that if fiscal policy turns contractionary to reduce the deficit,
a. monetary policy can turn expansionary to counteract the effects on aggregate demand.
b. monetary policy must be contractionary to reinforce the good effects of contractionary fiscal policy.
c. foreign investment in the United States must be encouraged.
d. taxes on the earnings from stock market gains should be increased.
a
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All points within the production possibilities frontier are
A) unattainable. B) efficient. C) inefficient. D) profitable.
The general message of the folk theorems is:
a. Nash equilibria may not be sustainable over many replications of a game. b. payoffs that are unambiguously preferred to Nash equilibria may be sustainable over many replications of a game. c. credible threats may inhibit the achievement of mutually beneficial outcomes over many replications of a game. d. just plain folk play the best games.