In a Nash equilibrium no player wants to change his or her strategy

Covered interest arbitrage involves both

A) the purchase of a foreign asset and a forward contract in the market for foreign exchange. B) the purchase of a domestic asset and a spot contract in the market for foreign exchange. C) the sale of a foreign asset and the purchase of a forward contract in the market for foreign exchange. D) the sale of domestic stocks and the purchase of foreign bonds. E) None of the above.

Which of the following raises domestic prices only when demand is relatively low?

A. Lump sum tariff B. Excise tariff C. Domestic subsidies D. Lump sum tariff and excise tariff