The 95% confidence interval for the dynamic multipliers should be computed by using the estimated coefficient ±
A) 1.96 times the RMSFE.
B) 1.96 times the HAC standard errors.
C) 1.96, since the HAC errors are standardized.
D) 1.64 times the HAC standard errors since the alternative hypothesis is one-sided.
Answer: B
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How will the purchase of $100 million of government securities by the Federal Reserve change bank reserves and total checking account deposits in the banking system as a whole? Assume that banks do not hold any excess reserves, that households and
firms do not change the amount of currency they hold, and that the required reserve ratio is 20 percent.
Under a fixed exchange rate system, the central bank of a country experiencing a balance of payments deficit will:
A) increase the supply of the domestic currency to prevent currency depreciation. B) increase the demand for the domestic currency to prevent currency depreciation. C) increase the supply of domestic currency to prevent a currency appreciation. D) increase the demand for domestic currency to prevent a currency appreciation.
Loss aversion is the tendency to experience losses as:
A. more painful than the pleasures that result from gains of the same magnitude. B. more painful than gains of any magnitude. C. less painful than the pleasures that result from gains of the same magnitude. D. just as painful as the pleasures that result from gains of the same magnitude.
Economics deals with
A. how society allocates unlimited resources. B. how individuals allocate scarce resources to satisfy unlimited human wants. C. how to profit from the stock market. D. how to satisfy limited human wants.