In practice, you may want to use the OLS estimator instead of the WLS because
A) heteroskedasticity is seldom a realistic problem
B) OLS is easier to calculate
C) heteroskedasticity robust standard errors can be calculated
D) the functional form of the conditional variance function is rarely known
Answer: D
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The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the deadweight loss equals
A) 0. B) $800,000. C) $1,600,000. D) more than $1,600,000. E) more than $800,000 and less than $1,600,000.
The regulatory lag:
A) always benefits the regulated firm. B) is likely to occur with rate-of-return regulation. C) promotes economic efficiency. D) all of the above
An excise tax
a. is a sales tax on the purchase of a particular good or service. b. is a tax on the profits earned from the sale of an asset. c. represents a surcharge on corporate profits beyond the normal corporate tax rate. d. is a tax on income-earning rental property.
Required reserves represent
A. Dollars that may be lent. B. A flaw in the banking system. C. A leakage from the flow of money. D. The desire on the part of some banks to hold funds and not lend them out.