Consider the following simple regression model y = 0 + 1x1 + u. Suppose z is an instrument for x. if Cov(z,u) = 0 and Cov(z,x)

src="@@PLUGINFILE@@/ppg__cognero__Ch_15_Instrumental_Variables_Estimation_and_Two_Strage_Least_Squares__media__724969d3-56c7-4675-83d3-90a5aadf476f.PNG" style="vertical-align:-3px;" width="10px" height="19px" /> 0, the value of 1 in terms of population covariances is _____.

A.
B.
C. Cov(z,u)
D. Cov(z,x)

---

Answer: A

Economics

Exponential growth implies that:

A) relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growing. B) growth rates will alternate between positive and negative values in every consecutive time period. C) relatively small differences in growth rates translates into large differences in the level of a quantity after many years of growing. D) growth rates can only be positive.

An advance in technology shifts the production function upward and shifts the labor

A) demand curve leftward. B) supply curve leftward. C) demand curve rightward. D) supply curve rightward.

According to the misperceptions theory, if the Fed wanted to use monetary policy to influence the real economy it would have to

A) increase the money supply whenever the economy was in a recession. B) decrease the money supply whenever the economy was in an inflationary boom. C) surprise the public with unexpected changes in monetary policy. D) abide by the monetary targets it announced.

In the long run, foreign labor remains cheap when and if

A. it becomes highly efficient and competes successfully internationally. B. countries erect barriers to trade between poor countries. C. productivity increases more rapidly in poor countries than in rich countries. D. it remains inefficient compared to other countries’ labor.