A direct relationship occurs when
A) the two variables being compared change in opposite directions, or when one goes up the other goes down.
B) a change in one of the variables causes a change in the other variable in any direction.
C) the two variables being compared change in the same direction, or when one goes up the other also goes up.
D) the two variables have no identifiable relationship with each other.
C
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Diebold and Rudebusch showed that the composite index of leading indicators did not improve forecasts of industrial production because
A) the index is not produced in a timely manner. B) the government manipulates the index so it never predicts a recession. C) the index is not designed for forecasting. D) data on the components of the index are revised.
Firms in perfectly competitive markets who wish to maximize profits ought to produce:
A. where marginal revenue equals market price. B. as many units as their scale allows. C. at capacity and plan to expand in the long run. D. where total profit is the greatest.
In the macroeconomic model of aggregate supply and aggregate demand:
A. price is the overall price level. B. quantity represents GDP. C. price is calculated as a weighted average of the prices of all goods and services. D. All of these are true.
Bank regulators are concerned about the safety of depositors because
a. bank failures were common throughout most of U.S. history and have even occurred in recent decades. b. in the absence of federal insurance, depositors would lose their money if a bank failed. c. nervous depositors may rush to withdraw their accounts and produce a "run" that could threaten even a sound bank. d. All of the above are correct.