Two series are said to be cointegrated if:
A. both series are I(1) but a linear combination of them is I(0).
B. both series are I(0) but a linear combination of them is I(1).
C. both series have the same set of explanatory variables but a different dependent variable.
D. both series have the same dependent variable but a different set of explanatory variables.
Answer: B
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Which of the following is false?
a. A production possibilities curve represents the potential total output combinations of any two goods for an economy. b. On a production possibilities curve, we assume that the economy has a given quantity and quality of resources and technology available to use for production. c. If an economy is operating inside its production possibilities curve, it is not at full capacity, and is operating inefficiently. Such an economy's actual output is less than potential output. d. By putting unemployed resources to work or by putting already employed resources to better uses, we could shift out the production possibilities curve.
During 1980-2009, the per-capita incomes of less developed countries (LDCs)
What will be an ideal response?
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Refer to Figure 2-10. If the economy is currently producing at point C, what is the opportunity cost of moving to point B?
A) 46 thousand forks B) 26 thousand forks C) 40 thousand spoons D) 20 thousand spoons