Which of the following is a drawback of including proxy variables in a regression model?
A. It leads to misspecification analysis.
B. It reduces the error variance.
C. It increases the error variance.
D. It exacerbates multicollinearity.
Answer: D
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The degree to which an asset can be acquired or disposed of without much danger of any intervening loss in nominal value is known as
A) transaction deposits. B) a time deposit. C) liquidity. D) M2.
Which statement is true?
A. Actual reserves - required reserves = excess reserves. B. Required reserves - actual reserves = excess reserves. C. Required reserves + actual reserves = excess reserves. D. None of the statements are true.
The idea of the U.S.-Canadian Free-Trade Agreement that removed all barriers to trade including tariffs and quotas between the United States and Canada by 1998 was to
A. increase the price of U.S. goods sold in Canada. B. increase the amount that the United States exports to Canada and the amount that the United States imports from Canada. C. increase the price of Canadian goods sold in the United States. D. increase the amount that the United States exports to Canada and decrease the amount that the United States imports from Canada.
T-Shirt Enterprises is selling in a purely competitive market. It is producing 3000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should:
A. Shut down in the short run B. Decrease output to 2500 units C. Continue to produce 3000 units D. Increase output to 3500 units