Distinguish between fixed and flexible exchange rate systems
What will be an ideal response?
A fixed exchange rate system is a system in which governments peg exchange rates to prevent their currencies from fluctuating. A flexible exchange rate system is a system in which exchange rates are determined by free markets.
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The table above shows the payoff matrix for a prisoners' dilemma. In the Nash equilibrium
A) both prisoners get 3 years in jail. B) both prisoners get 2 years in jail. C) both prisoners get 1 year in jail. D) both prisoners get 10 years in jail.
In a two-player simultaneous game where neither player has a dominant strategy,
A) there is never a Nash equilibrium. B) there is only one Nash equilibrium. C) the actual outcome is unpredictable. D) the actual outcome will not be a Nash equilibrium.