If the random walk theory is correct, prudent investors could choose their stock portfolio by
A. throwing darts at the newspaper’s financial page.
B. spending money to consult a stock forecaster.
C. spending time analyzing past stock performance.
D. not investing in stocks at all since price behavior is completely erratic.
Answer: A
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The time it takes for policy makers to obtain data indicating what is happening in the economy is called
A) the data lag. B) the recognition lag. C) the legislative lag. D) the implementation lag. E) the effectiveness lag.
Under imperfect multicollinearity
A) the OLS estimator cannot be computed. B) two or more of the regressors are highly correlated. C) the OLS estimator is biased even in samples of n > 100. D) the error terms are highly, but not perfectly, correlated.
A decrease in quantity supplied
a. results in a movement downward and to the left along a fixed supply curve. b. results in a movement upward and to the right along a fixed supply curve. c. shifts the supply curve to the left. d. shifts the supply curve to the right.
In Figure 16.2, according to supply-side theorists, a relaxation of trade barriers would result in a
A. Movement from point A to point B. B. Movement from point B to point A. C. Rightward shift in the Phillips curve. D. Leftward shift in the Phillips curve.