The Federal Reserve System was founded in:

Refer to the scenario above. Which of the following will be true if the service center has a reputation of trustworthiness?

A) The equilibrium outcome will be equitable. B) A unique equilibrium will not occur. C) Multiple equilibria will occur. D) The equilibrium outcome will be socially efficient.

Which factor would facilitate tacit collusion among firms in a market?

a. an increase in the number of firms. b. a decrease in the probability the market will continue into future periods. c. a decrease in the interest rate. d. none of these.