Looking at the globalized AS/AD model, the economy can exceed potential output, without generating accelerating goods inflation, because:
A. the domestic price level always exceeds the world price level.
B. the world price level always exceeds the domestic price level.
C. the world price level puts a cap on the domestic price level.
D. the LRAS curve is no longer vertical.
Answer: C
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Concerning economic growth, which of the following is true?
a. A favorable institutional environment will tend to attract more investment in human and physical capital. b. Poor nations grow slowly because they do not have access to modern technology c. Human and physical capital investments are largely irrelevant to economic growth. d. Nations achieve high rates of economic growth primarily because of their natural resource endowments.
Productivity in manufacturing sectors has risen faster than in service sectors
a. True b. False Indicate whether the statement is true or false
Suppose labor and capital are the only two factors used by a firm to produce pencils. Which of the following statements is true of the average variable costs of this firm?
a. The average variable cost of this firm will be equal to the ratio of the cost of capital and the quantity of output produced by the firm. b. The average variable cost of this firm will be equal to the ratio of the total cost of production and the quantity of output produced by the firm. c. The average variable cost of this firm will be equal to the ratio of wages paid to the workers and the quantity of output produced by the firm. d. The average variable cost of this firm will be equal to the ratio of the quantity of output produced by the firm and the wages paid to the workers.
Which of the following is true of Regression Specification Error Test (RESET)?
A. It tests if the functional form of a regression model is misspecified. B. It detects the presence of dummy variables in a regression model. C. It helps in the detection of heteroskedasticity when the functional form of the model is correctly specified. D. It helps in the detection of multicollinearity among the independent variables in a regression model.