The difference between a Nash equilibrium strategy and a dominant strategy is:
a. nothing; they are synonymous.
b. the former is stable but the latter is unstable.
c. the former must be a best response to all others' strategy profiles, whereas the latter need only be a best response to others' Nash equilibrium strategies.
d. the former need only be a best response to others' Nash equilibrium strategies, whereas the latter must be a best response to all others' strategy profiles.
b
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The government has decided to give every person in the U.S. a $5 coupon that they can use at the grocery store to purchase their choice of cheese. We would expect this policy to lead to
A) an increase in aggregate demand but not equivalent to the full impact of all of the coupons redeemed due to some direct expenditure offset. B) no increase in aggregate demand because there would be no direct expenditure offset. C) an increase in aggregate demand equivalent to the full impact of all of the coupons redeemable. D) no increase in aggregate demand due to the Ricardian equivalence theorem.
Tom, the manager and owner of a small company, believes in the signaling theory of education, not the human capital theory. As such, we would expect Tom not to offer which of the following company benefits?
a. employer-matching 401k retirement plan contributions b. tuition reimbursement for workers who take college classes c. on-site day care d. health insurance