The conditions for a valid instruments do not include the following:
A) each instrument must be uncorrelated with the error term.
B) each one of the instrumental variables must be normally distributed.
C) at least one of the instruments must enter the population regression of X on the Zs and the Ws.
D) perfect multicollinearity between the predicted endogenous variables and the exogenous variables must be ruled out.
Answer: B) each one of the instrumental variables must be normally distributed.
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Refer to Table 13-1. What is the marginal revenue of the 3rd unit?
A) $6.50 B) $5.50 C) $1.83 D) $0.50
The equilibrium wage rate in an industry is determined by
A) finding where the market supply curve indicates that the substitution effect and income effect of a wage increase are offsetting. B) the intersection of the market demand curve for labor and the market supply curve for labor. C) the strength of the substitution effect relative to the elasticity of demand for labor. D) whether workers or management are better at negotiating.
Which would most likely increase aggregate supply?
a. An increase in productivity b. An increase in the prices of imported products c. A decrease in net exports d. A decrease in business subsidies
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.