In the language of economics, which of the following would be defined as investment?
a. The purchase of a U.S. savings bond
b. The purchase of 100 shares of Ford Motor Company stock
c. The deposit of $1,000 into a savings account
d. The purchase of $500 worth of gold
e. The accumulation of inventories by a firm
E
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Declining real GDP for two quarters in a row is often called a recession
Indicate whether the statement is true or false
Refer to the above figure. An external cost exists. The amount of that cost is represented by
A) P2. B) Q1. C) the vertical distance between point A and the supply curve S1. D) the distance between C and A.
The opportunity cost of holding a dollar is
A) a dollar. B) the price of a government bond. C) less than a dollar. D) the interest yield that could have been earned by holding some other asset.
When calculating the TSLS standard errors
A) you do not have to worry about heteroskedasticity, since it was eliminated in the first stage B) you can use the standard errors reported by OLS estimation of the second stage regression. C) the critical values from the standard normal table should be adjusted for the proper degrees of freedom. D) you should use heteroskedasticity-robust standard errors.