In panel data, the regression error
A) is likely to be correlated over time within an entity
B) should be calculated taking into account heteroskedasticity but not autocorrelation
C) only exists for the case of T > 2
D) fits all of the three descriptions above
Answer: A) is likely to be correlated over time within an entity
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If a restaurant was a natural monopoly, dividing the restaurant equally into two separate restaurants would
A) increase total revenue. B) make marginal revenue less elastic. C) decrease marginal cost. D) raise average total cost.
If the marginal product of labor is decreasing, then marginal cost of production must be rising
Indicate whether the statement is true or false
Air travel from New York to Miami costs $300 and takes 6 hours. A bus ticket between the cities costs $150 and takes 56 hours. Other things constant, the minimum value of one's time that would induce a rational individual to fly rather than drive would be
a. $1 per hour. b. $3 per hour. c. $5 per hour. d. $50 per hour.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.