Indicate for which of the following examples you cannot use Entity and Time Fixed Effects: a regression of
A) OECD unemployment rates on unemployment insurance generosity for the period 1980-2006 (annual data).
B) the (log of) earnings on the number of years of education, using the Current Population Survey of 60,000 households for March 2006.
C) the per capita income level in Canadian Provinces on provincial population growth rates, using decade averages for 1960, 1970, and 1980.
D) the risk premium of 75 stocks on the market premium for the years 1998-2006.
Answer: B) the (log of) earnings on the number of years of education, using the Current Population Survey of 60,000 households for March 2006.
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In the 1980s, expansionary fiscal policy is believed to have crowded out
A) domestic investment as interest rates rose. B) exports and imports as interest rates rose. C) exports but not domestic investment as interest rates rose. D) domestic investment as interest rates fell.
Compared to a cost plus incentive fee contract, the cost plus percentage fee contract has strong incentives to minimize costs
a. True b. False
Normative analysis:
A. involves the formulation and testing of hypotheses. B. is a value-free evaluation of a policy. C. is a matter of values and opinions. D. examines if the policy actually accomplished its goal.
If the short-run equilibrium output of the United States exceeds the potential output, the Fed:
a. employs an active monetary policy to close a recessionary gap. b. employs an active monetary policy to close an expansionary gap. c. relies on a passive approach to close a recessionary gap. d. relies on a passive approach to close an expansionary gap e. employs an expansionary fiscal policy.