When a one-percent change in price is accompanied by a larger percent change in quantity demanded,
a. demand is inelastic
b. supply is elastic
c. the good is a normal good
d. the good is an inferior good
e. demand is elastic
E
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In practice, the most difficult aspect of IV estimation is
A) finding instruments that are both relevant and exogenous. B) that you have to use two stages in the estimation process. C) calculating the J-statistic. D) finding instruments that are exogenous. Relevant instruments are easy to find.
Explain why a company offering homeowners insurance policies would want to insure homes across a wide geographic area
What will be an ideal response?
Which of the following is NOT a reason to study economics?
a. To prepare for other careers b. To achieve social change c. To understand the world better d. To reduce taxes on corporations
The Fed raises the federal funds rate when it
A) fears inflation. B) wants to increase the quantity of money. C) fears recession. D) wants to encourage bank lending. E) cannot change the quantity of money.