The procedure of comparing different instrumental variables estimates of the same parameter is an example of testing _____.
A. overidentifying restrictions
B. endogeneity
C. heteroskedasticity
D. serial correlation
Answer: A
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One advantage of a floating exchange rate system compared to a fixed or managed float exchange rate system is
A) it is easier for central banks to control inflation. B) there is no need for government intervention. C) it allows greater exchange rate stability. D) it eliminates the possibility of depreciation during a recession.
Suppose that alcohol consumption creates a negative externality. What can the government do to equate the equilibrium quantity of alcohol and the socially optimal quantity of alcohol?
a. impose a tax on alcohol that is equal to the per-unit externality b. offer a subsidy on alcohol that is equal to the per-unit externality c. impose a regulation limiting the amount of alcohol that each consumer can purchase d. nothing
Fill in the blanks. The demand curve for an inferior good is _________ sloping, while the demand curve for a Giffen good is _______ sloping.
a. downward; downward. b. downward; upward. c. upward; downward. d. upward; upward.
Refer to the information provided in Figure 9.1 below to answer the question(s) that follow. 
Figure 9.1Refer to Figure 9.1. This farmer would earn a zero economic profit if price was
A. $7. B. $9. C. $10. D. $11.