If, in a Tariff Game Between Two Governments, Both Countries

question 8

Multiple Choice

If, in a tariff game between two governments, both countries are on their tariff reaction functions, then each country __________ maximizing its welfare given the tariff of the other country. In this situation, there __________ incentive for each country to reduce its tariff unilaterally.

• A) is; is an
• B) is; is no
• C) is not; is an
• D) is not; is