Which of the following factors is not relevant in explaining the persistence of wage differentials?
A. Labor immobility.
B. Compensating differences.
C. Free public education.
D. Noncompeting groups.
Answer: C
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The first step in measuring the CPI is to
A) select the market basket. B) conduct a monthly survey. C) collect prices for the basket of goods and services. D) interview businesses.
You have collected time series for various macroeconomic variables to test if there is a single cointegrating relationship among multiple variables. Formulate the null hypothesis and compare the EG–ADF statistic to its critical value
(a) Canadian unemployment rate, Canadian Inflation Rate, United States unemployment rate, United States inflation rate; t = (-3.374). (b) Approval of United States presidents (Gallup poll), cyclical unemployment rate, inflation rate, Michigan Index of Consumer Sentiment; t = (-3.837). (c) The log of real GDP, log of real government expenditures, log of real money supply (M2); t = (-2.23). (d) Briefly explain how you could potentially improve on VAR(p) forecasts by using a cointegrating vector. What will be an ideal response?
With fixed exchange rates, fiscal policy is more powerful with a high degree of capital mobility than with a low degree of capital mobility.
Answer the following statement true (T) or false (F)
When income falls
A) the demand for a normal goods rises. B) the demand for an inferior goods rises. C) there is a movement downward along the demand curve for a normal good. D) there is a movement downward along the demand curve for an inferior good.