The correlated random effects approach cannot be applied to models with many time-varying explanatory variables.
Answer the following statement true (T) or false (F)
False
Rationale: FEEDBACK: The correlated random effects approach can be applied to models with many time-varying explanatory variables.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Since 1960, the only period of several years when the full-employment government budget deficit was negative (that is, there was a full-employment surplus) was
A) from 2000 to 2005. B) the late 1990s and early 2000s. C) the mid-1980s. D) the early 1970s.
In the Solow growth model, investment is a ________ variable and depreciation is a ________ variable
A) stock; stock B) stock; flow C) flow; stock D) flow; flow
Suppose that there is an excess supply of economics professors. Should universities necessarily reduce salaries? What does standard economic theory suggest? What does efficiency-wage theory suggest?