Economic theory provides a basis for which variables are relevant and should be included in an econometric model. But econometrics provides tools to estimate ____ which tells us ____.
a. a model; the functional form that should be used
b. causality; why it happens that way
c. a parameter; how much or to what degree things change
d. variables; the probability of a specific outcome
Answer: c. a parameter; how much or to what degree things change
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When the bond prices rise, interest rates fall.
Answer the following statement true (T) or false (F)
Table 1.2 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus.Table 1.2Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost(Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)A20Na195 B35 180 C45 150 D50 100NAOn the basis Table 1.2, if the economy is currently producing at point C, what is the opportunity cost of producing at point B?
A. 180 Stealth bombers. B. 35 Stealth bombers. C. 45 B-1 bombers. D. 10 B-1 bombers.
When analyzing the behavior of oligopolists, which of the following is crucial for the success of game theoretic analysis?
A. Payoffs do not need to reflect the true payoffs of the oligopolists, they just need to be greater than or equal to zero. B. Do not construct the payoffs of the oligopolists to be interdependent, as the payoff of one player usually does not affect the payoff of the other players. C. Assume that oligopolists always move simultaneously. D. Make sure the problem you are considering is of a one-shot or repeated nature, and you model it accordingly because the order in which players make decisions is important.
Which of the following nations DOES use the euro and participate in the Treaty on European Union?
A) Sweden B) Portugal C) The United Kingdom D) Norway