If the Fed purchases $1 million worth of securities and the required reserve ratio is 8%, by how much will deposits increase (assuming no change in excess reserves or the public's currency holdings)?
A) rise by $1 million
B) decline by $1 million
C) rise by $8 million
D) rise by $12.5 million
D
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Which type of stock should result in the best return according to the Efficient Markets Hypothesis?
A) a firm that is expected to be highly profitable in the future B) a firm that is considered to be undervalued C) a firm expected to earn little profit in the future D) none of the above
According to Keynes, the classical model could not explain
A) a recession or depression. B) periods of rising unemployment. C) a long-term economic decline. D) periods of rising interest rates.
Having more relevant instruments
A) is a problem because instead of being just identified, the regression now becomes overidentified. B) is like having a larger sample size in that the more information is available for use in the IV regressions. C) typically results in larger standard errors for the TSLS estimator. D) is not as important for inference as having the same number of endogenous variables as instruments.
Refer to the above table. What does the marginal revenue product equal when 27 workers are hired a week?
A) $1040 B) $216 C) $16.25 D) $8