What is the present value of $10,000 8 years from now if the interest rate is 8%?
What will be an ideal response?
$10,000 x 54.03 = $5,403
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Why is the price elasticity of demand generally a negative number?
What will be an ideal response?
Ceteris paribus, if the price of lumber increases, we would expect an increase in the supply of lumber
a. True b. False Indicate whether the statement is true or false
To calculate nominal GDP, you:
a. Multiply the quantity of everything consumed by the price of everything consumed, and sum the results. b. Multiply the exchange rate by the price of each good and service produced. Then sum them and divide by the domestic price index. c. Add the price of everything consumed to the quantity of everything consumed and sum the results. d. Add the quantities of everything produced to the average national price level and then multiply times one plus the inflation rate [i.e., (1 + inflation rate)]. e. Multiply the quantity of everything produced by the price of everything produced, and sum the results.
What can we conclude about the endogeneity of an explanatory variable if the OLS and 2SLS estimates are significantly different? Assume that the instrument used was exogenous.
A. The explanatory variable is not endogenous and therefore using 2SLS is ill-advised. B. The explanatory variable is not endogenous and therefore OLS should not be used. C. The explanatory variable is endogenous and therefore using 2SLS should be considered. D. The explanatory variable is endogenous and therefore OLS should be used.