Assume that you have used the OLS estimator in the cointegrating regression and test the residual for a unit root using an ADF test. The resulting ADF test statistic has a
A) normal distribution in large samples.
B) non-normal distribution which requires ADF critical values for inference.
C) non-normal distribution which requires EG-ADF critical values for inference.
D) normal distribution when HAC standard errors are used.
Answer: C
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If the real interest rate falls, people decide to ________ because the opportunity cost of ________
A) decrease their consumption expenditure; consumption has decreased B) increase their consumption expenditure; consumption has decreased C) increase their consumption expenditure; saving has decreased D) save more; saving has decreased E) None of the above answers is correct.
Refer to Figure 4-6. What area represents the deadweight loss at P2?
A) G + H B) C + E C) B + C D) C + E + H
Since the firm in the above figure is operating in a monopolistically competitive industry, in the long run we can expect to see
A) the typical firm's economic profits expand as production becomes more efficient. B) more firms entering the industry until economic profits are zero. C) the typical firm producing at the minimum point on its ATC curve. D) each firm expand its share of the total market.
One of the major insights by economist John Maynard Keynes about inventories and demand was that if planned inventories:
A. > actual inventories then demand was higher than anticipated. B. < actual inventories then demand was lower than anticipated. C. = actual inventories then demand was higher than anticipated. D. > actual inventories then demand was lower than anticipated.