Choose the letter of the diagram in Figure 36.2 that represents the shift in the foreign exchange market for dollars given the following situation, ceteris paribus: The Japanese remove some tariffs on American goods.
A. a.
B. b.
C. c.
D. d.
Answer: D
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The phenomenon of equipment or structure going through "wear and tear" and eventually becoming obsolete is referred to as:
A) depreciation. B) capital tear. C) intertemporal loss. D) creative destruction.
Quantity demanded is affected not just by price but by other variables, such as income and the prices of other goods.
Answer the following statement true (T) or false (F)
When you have an omitted variable problem, the assumption that E(ui Xi) = 0 is violated. This implies that
A) the sum of the residuals is no longer zero. B) there is another estimator called weighted least squares, which is BLUE. C) the sum of the residuals times any of the explanatory variables is no longer zero. D) the OLS estimator is no longer consistent.
Which of the following allows workers to focus on the types of production where they have an advantage?
a. Deindustrialization b. Diseconomies of scale c. Scarcity d. Specialization