Economic growth can be seen by an outward shift of:
A. The Production Possibility Frontier
B. The Gross Domestic Barrier
C. The Marginal Consumption Frontier
D. The Minimum Efficient Scale
Answer: A. The Production Possibility Frontier
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What will be an ideal response?
In the simple accelerator theory an increase in expected sales will
A) lead to an increase in net investment. B) not necessarily lead to an increase in net investment. C) lead to an immediate increase in replacement investment. D) lead to an increase in net investment in the following period.
Explain why most indifference curves are convex
What will be an ideal response?
One of your peers wants to analyze whether or not participating in varsity sports lowers or increases the GPA of students
She decides to collect data from 110 male and female students on their GPA and the number of hours they spend participating in varsity sports. The coefficient in the simple regression function turns out to be significantly negative, using the t-statistic and carrying out the appropriate hypothesis test. Upon reflection, she is concerned that she did not ask the students in her sample whether or not they were female or male. You point out to her that you are more concerned about the effect of omitted variables in her regression, such as the incoming SAT score of the students, and whether or not they are in a major from a high/low grading department. Elaborate on your argument. What will be an ideal response?