An "omitted variable" is
A) a variable that has no impact on other variables in an economic analysis.
B) a variable which is purposely omitted from an economic analysis.
C) a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect.
D) a variable which is inadvertently omitted from an economic analysis.
C
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The steps in the process of commercial bank lending in order are
A) borrower bank search, credit analysis, borrower-bank negotiation, bank funding. B) borrower bank search, borrower-bank negotiation, credit analysis, bank funding. C) credit analysis, borrower bank search, borrower-bank negotiation, bank funding. D) borrower-bank negotiation, borrower bank search, credit analysis, bank funding.
An increase in the money supply will cause the nominal interest rate to ________ and the quantity of money to ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
To avoid double counting in the calculation of GDP,
a. net exports should be excluded. b. the value of intermediate goods and services should be excluded. c. the capital consumption allowance should be excluded. d. business investment should be excluded. e. government purchases should be excluded.
A free-rider problem exists when a good that has the following characteristic?
a. Rivalry in consumption. b. Elastic demand. c. Inelastic demand. d. Nonexcludable.