A customs union will increase the welfare of its members and the rest of the world if:
a. trade creation is greater than trade diversion.
b. trade creation is less than trade diversion.
c. trade creation is positive.
d. trade diversion is positive.
Ans: a. trade creation is greater than trade diversion.
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How would the value of output produced at an American-owned factory in the United States and a foreign-owned factory in the United States be treated in GDP accounting?
What will be an ideal response?
When a prisoners' dilemma game is repeated a finite number of times (T)
A) cooperation unravels during the first round of the game, resulting in the static game Nash equilibrium.
B) cooperation continues until the T-2 round, where the players will switch to a non-cooperative Nash equilibrium.
C) firms cooperate and achieve the collusive Nash equilibrium for all rounds.
D) None of the above.