A horizontal demand curve is perfectly elastic because a change in price will not induce a change in quantity demanded.
Answer the following statement true (T) or false (F)
False
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The biggest conceptual difference between using VARs for forecasting and using them for structural modeling is that
A) you need to use the Granger causality test for structural modeling. B) structural modeling requires very specific assumptions derived from economic theory and institutional knowledge of what is exogenous and what is not. C) you can no longer use the information criteria to decide on the lag length. D) structural modeling only allows a maximum of three equations in the VAR.
The text discusses the projected increases in the claims on the economy by entitlement programs between the mid 1990s and 2035 . It argues that
a. the projected growth of Medicare claims far outstrips that of Social Security b. as a percentage of GDP, both Medicare costs and Social Security costs will fall c. age and health-care demands are related with the majority of claimants being the young d. the rate of growth of Social Security payments will be higher than the rates for either Medicare and Medicaid e. Social Security and Medicare costs will remain at about the same percent of GDP
Minimum wage laws contribute to structural unemployment by:
A. keeping wages below the market-clearing level. B. forcing unemployed workers to take the first job offered to them. C. allowing unemployed workers to search longer or less intensively for jobs. D. keeping wages above the market-clearing level.
Price decreases will ________ a household's choice set.
A. decrease B. increase C. not change D. sometimes increase and other times decrease