What is the most likely explanation for how the percentages are allocated to each category of the CPI?
a. They reflect the proportion of income the average American spends on that category.
b. They reflect the relative vulnerability of each category to inflation.
c. They reflect the relative expensiveness of the items in each category.
d. They reflect the proportion needed to keep the rate of inflation stable from year to
year.
a. They reflect the proportion of income the average American spends on that category.
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When a game has more than one Nash equilibrium
a. players will choose the strategies which maximize total welfare. b. players are likely to choose the strategies which minimize total welfare. c. it is difficult to predict which of the equilibria will occur or whether it is stable. d. it is difficult to predict which of the equilibria will occur but once one is reached it is likely to remain stable.
In an exogenous growth model, growth is caused by
A) capital accumulation. B) government policies. C) human capital accumulation. D) forces that are not explained by the model itself.
Why does a patent stimulate research?
A) Patents give firms time to do research. B) Patents give firms the opportunity to recover research costs and thus serve as a profit motive. C) Without patents firms would not research as much. D) They don't.
The assumption that X has full column rank implies that
A) the number of observations equals the number of regressors. B) binary variables are absent from the list of regressors. C) there is no perfect multicollinearity. D) none of the regressors appear in natural logarithm form.