?Consider the following simple regression model y = ?0 + ?1x1 + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0.
Then, the OLS estimator has a(n) _____.
A. ?downward bias
B. asymptotic bias
C. ?upward bias
D. substantial bias
Answer: C
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The distribution of world income is ________ the distribution of U.S. income
A) more equal than B) less equal than C) the same as D) not comparable to
If aggregate expenditures exceed real GDP, then:
a. employment falls. b. the economy will have deflation. c. firms are depleting their inventories. d. the money supply will increase.
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and nominal value of the domestic currency falls. b. The real risk-free interest rate falls and nominal value of the domestic currency falls. c. The real risk-free interest rate and nominal value of the domestic currency remain the same. d. The real risk-free interest rate rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Economists believe that people's wants are
A) finite. B) infinite. C) irrational. D) unimportant because needs are more important than wants.