The necessary condition for identification of an equation is called the _____.
A. order condition
B. rank condition
C. condition of instrumental exogeneity
D. the condition of instrumental relevance
Answer: A
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Suppose the Fed buys $1 million of government securities from Bank One, a large commercial bank. Bank One's reserves ________ and its deposits ________
A) increase by $1 million; do not change B) increase by $1 million; increase by $1 million C) do not change; increase by $1 million D) do not change; do not change E) decrease by $1 million; do not change
Developing countries might be unable to respond smoothly to changing international price signals because of
(a) a lack of government regulation. (b) an abundance of skilled labor. (c) inelastic supply curves. (d) limited foreign exchange.
If leisure is a normal good, then the income effect of a decrease in wage will
A) decrease the number of hours worked. B) increase the number of hours worked. C) decrease the number of leisure hours. D) increase the sum of leisure plus hours worked.
Butter and margarine are examples of
a. substitutes b. complements c. externalities d. inferior goods e. goods that are independent of each other