Assume that a 3 percent increase in income across the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is:
A. negative and therefore X is an inferior good.
B. negative and therefore X is a normal good.
C. positive and therefore X is an inferior good.
D. positive and therefore X is a normal good.
Answer: A
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You try to explain the number of IBM shares traded in the stock market per day in 2005. As an independent variable you choose the closing price of the share. This is an example of
A) simultaneous causality. B) invalid inference due to a small sample size. C) sample selection bias since you should analyze more than one stock. D) a situation where homoskedasticity-only standard errors should be used since you only analyze one company.
Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?
a. Canada and China b. China and India c. Germany and India d. Germany and Pakistan
If GNP is $10,000 and depreciation is $2,000, what is NNP?
a. $5,000 b. $8,000 c. $12,000 d. $20,000
The demand for Chiquita bananas is more inelastic than the demand for fruit.
Answer the following statement true (T) or false (F)