Which of the following will cause Ordinary Least Square (OLS) estimates of a simple regression model, y = 
+ ![]()
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A. Every individual in the population has the same probability of being observed in the sample.
B. The observed values of span a wide range.
C. The constant,
is greater than the coefficient, 
.
D. The constant, is greater than the coefficient, x .
Answer: D
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Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has:
a. confused association and causation. b. misunderstood the Ceteris paribus assumption. c. used normative economics to answer a positive question. d. built an untestable model.
Tina Eckstrom and her husband bought a deferred annuity in 1954 that started paying them $700 a month in retirement benefits in 1994 . During the 40 years period, the price level rose 3.2 percent per year. Since 1994, the price level has risen 3.0 percent per year. They, along with millions of other people who live on fixed incomes, are examples of
a. those who are responsible for inflation b. people who gain from inflation c. people who lose from inflation d. the paradox of thrift e. underemployed persons
Short-run average cost is
A. less than short-run marginal cost when short-run marginal cost is decreasing. B. always greater than long-run average cost. C. always less than long-run average cost. D. both a and c E. none of the above
Explain the difference between endogenous and exogenous variables
What will be an ideal response?