Suppose a player can play 2 possible actions and has 5 possible decision nodes in a sequential game. Then he has 10 possible strategies he can play.

In the example of the peg between Britain and Germany, what would have been the case if Britain had adhered to the pegged exchange rate?

A) It would not have had the option of raising its own rate. B) It would have been able to inflate its currency to keep output stable. C) It would not have been able to inflate its currency to keep output stable. D) It would have had to raise taxes and balance its budget.

Which of the following is true of a price floor?

a. A price floor allows supply and demand to function effectively. b. A price floor is set such that the price is not allowed to increase above a certain level. c. A price floor is beneficial to buyers in a market. d. A price floor usually creates a shortage of a good in a market. e. A price floor is set such that the price is not allowed to decrease below a certain level.