Suppose That Inventories Were $80 Billion in Year 1 and $70

question 173

Multiple Choice

Suppose that inventories were $80 billion in year 1 and $70 billion in year 2. For year 2, national income accountants would

• A) add $10 billion to other elements of investment in calculating total investment.
• B) subtract $10 billion from other elements of investment in calculating total investment.
• C) add $75 billion (= $150/2) to other elements of investment in calculating total investment.
• D) subtract $75 billion (= $150/2) from other elements of investment in calculating total investment.

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Definitions:

Simultaneous Game

A type of game in game theory where participants make decisions or select strategies at the same time without knowledge of the others’ choices, exemplified by the Prisoner’s Dilemma.

Shoplifter

An individual who steals merchandise from a retail store.

Best Response

A strategy that yields the highest payoff for a player given the strategies chosen by other players in a strategic interaction or game.

Simultaneous Game

A type of game in game theory where all players make their decisions or choose their strategies at the same time.