In a dynamic game, rational players
A) will reject outcomes that are not subgame perfect.
B) use backward induction to determine best responses.
C) have strategies that select a Nash equilibrium in the game as a whole.
D) All of the above.
D
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Suppose that at the beginning of a loan contract, the real interest rate is 4% and expected inflation is currently 6%. If actual inflation turns out to be 7% over the loan contract period, then
A) lenders gain 1% of the loan value. B) borrowers lose 3% of the loan value. C) lenders gain 3% of the loan value. D) borrowers gain 1% of the loan value.
How have government policies and programs affected the volatility of the business cycle in the United States since 1950? Explain and provide at least two specific examples of policies or programs that may have had an impact
What will be an ideal response?