In the model yt= 0+ 1xt1+

style="vertical-align:middle;" />2xt2+ ….. + kxtk + ut, the explanatory variables, xt = (xt1, xt2…., xtk), are sequentially exogenous if:

A. E(u_t|x_t , x_t-1, ……) = E(u_t) = 0, t = 1,2, ….
B. E(u_t|x_t , x_t-1, ……) E(u_t) = 0, t = 1,2, ….
C. E(u_t|x_t , x_t-1, ……) = E(u_t) > 0, t = 1,2, ….
D. E(u_t|x_t , x_t-1, ……) = E(u_t) = 1, t = 1,2, ….

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Answer: A

Economics

Use the following table to answer the next question. All figures in the table are in billions. RGDPC + IExportsImports$500$525$15$1055056015106005951510650630151070066515107507001510The equilibrium level of real GDP in this private open economy is

A. $700 billion. B. $600 billion. C. $650 billion. D. $550 billion.

Suppose there is an increase in the money supply, but that people's demand for money balances increases by a greater amount at the same time. The net effect would be

A) lower interest rates, greater real GDP, and a higher price level as aggregate demand increases because of the indirect effect of the increase in the money supply. B) no change in aggregate demand or aggregate supply. C) a lower price level in the long run. D) an increase in aggregate demand due to the increase in the money supply, but a decrease in aggregate supply due to the increase in the demand for money.

Suppose a perfectly competitive firm's minimum average variable cost is $3 when it produces 50. If the price is $2 and the firm's marginal cost is $2, the firm should

A) continue to produce, but produce more than 50. B) continue to produce 50. C) continue to produce, but produce less than 50. D) shut down. E) continue to operate, but to determine the amount of production needs more information than is given.

Which of the following is the best example of a durable good?

a. the box of Dunkin' Donuts doughnut holes that you ate for lunch yesterday b. a bottle of Calvin Klein Obsession (cologne) c. your Ford Explorer d. a box of pecan nuts e. the services you bought when you had your ears pierced last week