An illustration of a non-credible commitment is the promise
a. to not increase capacity in a declining industry
b. to match a new entrant's discount price
c. to enter a profitable industry
d. to restrain output to the quota assigned by a cartel
e. to exit in the face of projected losses.
d
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Since Norway has close trading links with the euro zone
A) a small reduction in its price will lead to an increase in euro zone demand for Norwegian goods that is large relative to Norway's output. Thus, full employment can be restored fairly quickly. B) a small reduction in its price will lead to a decrease in euro zone demand for Norwegian goods that is large relative to Norway's output. Thus, full employment can be restored fairly quickly. C) a small reduction in its price will lead to an increase in euro zone demand for Norwegian goods that is small relative to Norway's output. Thus, full employment can be restored fairly quickly. D) a big reduction in its price will lead to an increase in euro zone demand for Norwegian goods that is large relative to Norway's output. Thus, full employment can be restored fairly quickly. E) a big reduction in its price will lead to a decrease in euro zone demand for Norwegian goods that is small relative to Norway's output. Thus, full employment can be restored fairly quickly.
Why is per-capita U.S. currency demand so large? Who is holding large amounts of U.S. currency and why are they doing so? Should U.S. policymakers be concerned about this? Why?
What will be an ideal response?