Which kind of risk affects the opportunity cost of capital?
A) Nondiversifiable risk
B) Diversifiable risk
C) Both nondiversifiable and diversifiable risk
D) The risk inherent in "riskless" assets such as U.S. Treasury bills
E) The risk inherent in "riskless" portfolios such as broad stock market holdings
A
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According to the Bureau of Economic Analysis, household disposable income fell by 0.3 percent of August, 2012. If all else remains the same, what is the likely impact of this fall on the real interest rate?
A) The real interest rate will rise. B) The real interest rate will fall. C) A change in household disposable income will have no impact on the real interest rate. D) The impact on the real interest rate is ambiguous.
The activities in which U.S. workers are relatively more productive
A) pay higher wages. B) are those in which the United States has a comparative advantage. C) are at risk of disappearing from the United States when NAFTA is completed. D) Both answers A and B are correct.
How have depository institutions made innovations that have influenced the composition of money?
What will be an ideal response?
In the case of regression with interactions, the coefficient of a binary variable should be interpreted as follows:
A) there are really problems in interpreting these, since the ln(0) is not defined. B) for the case of interacted regressors, the binary variable coefficient represents the various intercepts for the case when the binary variable equals one. C) first set all explanatory variables to one, with the exception of the binary variables. Then allow for each of the binary variables to take on the value of one sequentially. The resulting predicted value indicates the effect of the binary variable. D) first compute the expected values of Y for each possible case described by the set of binary variables. Next compare these expected values. Each coefficient can then be expressed either as an expected value or as the difference between two or more expected values.