Weak instruments are a problem because
A) the TSLS estimator may not be normally distributed, even in large samples.
B) they result in the instruments not being exogenous.
C) the TSLS estimator cannot be computed.
D) you cannot predict the endogenous variables any longer in the first stage.
Answer: A) the TSLS estimator may not be normally distributed, even in large samples.
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The distribution of income primarily determines which of the fundamental economic questions?
A) How the goods and services are to be produced? B) Who will receive the goods and services produced? C) What goods and services are to be produced? D) How to plan the economy?
Research on the effects of recessions on the real level of GDP shows that
A) recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase. B) recessions cause large, permanent reductions in the real level of GDP. C) recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary. D) recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.
In a situation of mutual interdependence and identical products, managers of oligopolistic firms ________ a response to their rivals' actions and ________ compete on price.
A) do not have; should B) have; should C) do not have; should not D) have; should not
Why is a point below the production possibilities curve less efficient than a point on that curve?
What will be an ideal response?