Which of the following is true of the dominant strategy equilibrium?
A) A dominant strategy equilibrium always leads to the best outcome for each player.
B) A dominant strategy equilibrium cannot be a Nash equilibrium.
C) A dominant strategy equilibrium is a Nash equilibrium if each player chooses a strategy that is a best response to the strategies of others.
D) A dominant strategy equilibrium occurs if the sum of the players' payoff is zero.
C
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If congress and the federal reserve bank both wished to encourage growth of productive capacity in an economy already close to full employment, it would be most appropriate to
a) increase interest rates by buying bonds on the open market b) use a tight money policy to decrease government spending c) reduce taxes on consumption, increase income taxes, and increase government transfer payments d) reduce interest rates by engaging in open market operations and raise taxes on personal income e) increases capital gains taxes and decrease the money supply
The share of U.S. personal saving in contractual form is ________, which helps ________ the effectiveness of stabilization policy
A) growing, enhance B) growing, undermine C) shrinking, enhance D) shrinking, undermine