The term "open market operations" refers to the
a. loan-making activities of commercial banks.
b. effect of expansionary monetary policy on interest rates.
c. operation of competitive markets in the banking industry as the result of deregulation.
d. buying and selling of government securities by the Federal Reserve.
D
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The above figure shows the payoff to two airlines, A and B, of serving a particular route. If the two airlines must decide simultaneously, what happens if the government imposes a $20 per firm tax on firms that service this route?
A) Neither firm has a dominant strategy. B) Not entering is a dominant strategy for both firms. C) Neither firm entering is a Nash equilibrium. D) Only firm A will enter.
Bobby's neighbor is growing a tree that is blocking Bobby's ocean view. Bobby is considering taking his neighbor to court. To Bobby, the tree represents a(n)
a. unclear property right b. public good c. free-rider good d. positive externality e. negative externality