Following an anticapitalist coup, Freedonia forces all citizens to turn in and stop using all credit cards. What is the most likely effect of this on velocity?
a. It will decrease.
b. It will increase.
c. It will remain constant.
d. Velocity is unrelated to credit cards.
a
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Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and costs $1.00. How should Pat get to work?
A. Pat should take the bus if saving half an hour is worth $0.50 or more. B. Pat should drive if saving half an hour is worth $0.50 or more. C. Pat should drive because it saves half an hour relative to taking the bus. D. Pat should take the bus because it costs $0.50 less than driving.
Holding all else constant, when a bank receives the funds for a deposited check
A) cash items in the process of collection fall by the amount of the check. B) bank assets increase by the amount of the check. C) bank liabilities decrease by the amount of the check. D) bank reserves increase by the amount of required reserves.
Quasi-experiments
A) provide a bridge between the econometric analysis of observational data sets and the statistical ideal of a true randomized controlled experiment. B) are not the same as experiments, and lessons learned from the use of the latter can therefore not be applied to them. C) most often use difference-in-difference estimators, which are quite different from OLS and instrumental variables methods studied in earlier chapters of the book. D) use the same methods as studied in earlier chapters of the book, and hence the interpretation of these methods is the same.
A critical assumption differs from a simplifying assumption in that a critical assumption
a. is a means of getting rid of extraneous details in the model b. cannot affect the conclusions of the model c. can affect the conclusions of the model d. is rarely used in economic models e. is never a fundamental assumption