A proxy variable _____.
A. increases the error variance of a regression model
B. cannot contain binary information
C. is used when data on a key independent variable is unavailable
D. is detected by running the Davidson-MacKinnon test
Answer: C
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The costs in time and other resources that parties incur in the process of facilitating an exchange of goods and services are called
A) implicit costs. B) explicit costs. C) enforcement costs. D) transactions costs.
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What will be an ideal response?
Under a gold standard, a discovery of gold will
A. decrease the general price level. B. increase the general price level. C. cause increased unemployment. D. cause decreased rates of economic growth.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward