In classical IS-LM analysis, the effects of a decline in desired investment include
A. an increase in the price level.
B. a decline in the real interest rate.
C. an increase in unemployment.
D. a decline in output.
Answer: B
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The number of transactions a typical dollar is used in during a given period is called the:
A. velocity of money. B. transaction rate. C. quantity theory of money. D. transaction velocity.
Which of the following assumptions is required for obtaining unbiased random effect estimators?
A. The idiosyncratic errors are heteroskedastic. B. The unobserved effect is independent of all explanatory variables in all time periods. C. The idiosyncratic errors are serially correlated. D. The unobserved effect is correlated with the explanatory variables.
Probabilities, which are based on past data or experience, are called
A) a priori. B) objective. C) uncertain. D) statistical.
Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, imports of British goods into the U.S. tend to: a. rise
b. fall. c. stay the same. d. change in an indeterminate direction.