A Game in Which Each Player Adopts Its Dominant Strategy

question 61

Multiple Choice

A game in which each player adopts its dominant strategy

• A)will not lead to an equilibrium.
• B)must be a cooperative game.
• C)could result in a Nash equilibrium.
• D)can never result in a Nash equilibrium.

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Definitions:

Natural Rate of Unemployment

The level of unemployment that exists when the labor market is in equilibrium, including frictional and structural unemployment but not cyclical unemployment.

Long-run Phillips Curve

A graphical representation indicating that in the long-term, there is no trade-off between inflation and unemployment, implying that the curve is vertical.

Phillips Curve

A theory suggesting an inverse relationship between the rate of inflation and the unemployment rate in an economy over the short run.

Monetary Policies

Actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals.