The authors provide an example that illustrates the calculation of the present discounted value for the lost wages from a deceased worker, and one component in this calculation is the worker's annual mortality rate (m)
Suppose we conduct this computation in two different ways --- one calculation assumes m is constant for all future periods, and the other calculation allows m to decline over time due to improvements in medical technology. Which estimated PDV will be larger? A) The PDV with constant m will be larger
B) The PDV with variable m will be larger
C) The two PDV's will be equal
D) The answer to this question depends on the assumed interest rate
B
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Adding an independent variable to a regression model will always reduce the coefficient of determination
Indicate whether the statement is true or false
The rational expectations school of thought argues that people form expectations based on:
a. all available information. b. only on information they believe to be "insider" information. c. their own instincts. d. only past information and experience.
According to the shortrun (specificfactors) model, how will FDI affect the marginal productivity of labor in the recipient nation?
a. The MPL will rise in the production of both the labor and capitalintensive goods. b. The MPL will rise only in the production of the labor intensive good. c. The MPL will rise only in the production of the capitalintensive good. d. The MPL will fall in the production of both the labor and capitalintensive goods.
A difficulty with using a uniform per-unit tax to address a negative externality is that
A) the tax will reduce output. B) the tax will increase price. C) the social cost of pollution might vary across geographic regions. D) the social cost of pollution should not be assessed on the consumers, but should be assessed on the firms.