Dennis and Denise Are Trying to Decide Whether to Go

question 11

Multiple Choice

Dennis and Denise are trying to decide whether to go hiking or biking this weekend. Depending on their choices, they might go together or they might go apart. Their payoffs in terms of their happiness are as follows. There is a pure-strategy Nash equilibrium at ____.

• A) Hiking, Hiking
• B) Biking, Hiking
• C) Biking, Biking
• D) none of these answers

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Definitions:

Gold Standard

A monetary system in which a country's currency or paper money has a value directly linked to gold.

Balance Of Trade

The difference between the value of a country's exports and the value of its imports. A positive balance indicates a surplus, while a negative balance indicates a deficit.

Freely Floating Exchange Rate

A currency system where the value of a country's currency is allowed to fluctuate according to the foreign exchange market.

Current Account Deficit

A situation where a country's total imports of goods, services, and transfers are greater than its total exports, indicating that it is spending more foreign currency than it is earning.