Author Question: What are the outcomes of the following games, assuming the max-min criteria is used? What will be ... (Read 31 times)

cmoore54

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What are the outcomes of the following games, assuming the max-min criteria is used?
 
  What will be an ideal response?

Question 2

When Norway unilaterally fixes its exchange rate against the euro and leaves the krone
 
  A) free to float against the non-euro currencies, it is able to keep at least some monetary independence.
  B) free to float against the non-euro currencies, it is unable to keep at least some monetary independence.
  C) free to float against the non-euro currencies, it is able to keep its monetary independence.
  D) run by crawling peg against the non-euro currencies, it is able to keep at least some monetary independence.
  E) fixed against the non-euro currencies, it is unable to keep its monetary independence.



k2629

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Answer to Question 1

There are two equilibria in this game, in which one regime uses a somewhat restrictive policy, while the other uses a very restrictive policy.

Answer to Question 2

B



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