Given the following econometric model, wage = ?0+ ?1educ + u, can we eliminate the error term u entirely?
A. Yes, by including other observable factors, such as experience, that can also influence wage. ?
B. Yes, by ensuring that everyone reports wage accurately and truthfully.
C. No, because education is not always reported accurately.
D. No, because many factors affect wage, that we cannot even list, let alone observe.
Answer: D
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The money multiplier is the
A) fraction of the monetary base that is kept in currency. B) number of times that the Fed conducts open market operations in a month. C) factor by which a change in the monetary base is multiplied to give the change in the quantity of money. D) factor by which a change in the deposits base is multiplied to give the change in the monetary base. E) proportion by which a change in the quantity of money changes the monetary base.
Why is abstraction important in developing economic theories?
Protecting endangered species is NOT an example of a public good because there are no external benefits associated with it.
Answer the following statement true (T) or false (F)
If a bank advertises 3 percent interest for a checking account and the anticipated rate of inflation is 3.5 percent
A. the real rate of interest earned on the account is 3.25 percent. B. the real rate of interest earned on the account is 0.5 percent. C. the real rate of interest earned on the account is 6.5 percent. D. the real rate of interest earned on the account is -0.5 percent.