A coordination game
A) is a game with multiple Nash equilibria where players can credibly coordinate to select one of the equilibria.
B) is a game where players coordinate to maximize joint profits.
C) cannot be solved with cheap talk.
D) always has one Nash equilibrium and no dominated strategies.
A
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Suppose that the equilibrium interest rate is 8 percent, but the actual interest rate is 5 percent. Very quickly,
a. bond prices fall b. bond prices will rise c. the interest rate will begin to fluctuate until bondholders reduce their demand for money d. the primary bond market will start its adjustment process e. the supply and demand for money will both increase
Ricardian equivalence will fail to hold if:
A. people increase their spending when they receive a tax rebate check. B. people save, and do not increase their spending when they receive a tax rebate check. C. intended expansionary effects of tax policy fail to occur. D. All of these.