If Xit is correlated with Xis for different values of s and t, then
A) Xit is said to be autocorrelated
B) the OLS estimator cannot be computed
C) statistical inference cannot proceed in a standard way even if clustered standard errors are used
D) this is not of practical importance since these correlations are typically weak in applications
Answer: A
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In the United States during the 1930s
A) government spending decreased and taxes increased, resulting in a fiscal contraction. B) government spending and taxes both decreased, resulting in a net fiscal contraction. C) government spending increased and taxes decreased, resulting in a fiscal expansion. D) government spending and taxes both increased, resulting in zero net fiscal expansion.
Aggregate demand ________ and shifts the AD curve ________ when ________
A) increases; rightward; government expenditure increases B) increases; leftward; government expenditure increases C) decreases; leftward; foreign income increases D) increases; rightward; future expected profit decreases E) increases; rightward; taxes increase
An incumbent firm uses limit pricing
A) to set price below a potential rival's marginal cost, thus making entry unprofitable. B) to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit. C) when it has no other advantages over a potential rival. D) if it is limited in the quantity of inputs it can purchase to produce output.
Allocative efficiency occurs where:
a. the price of a good is less than the marginal cost of producing it. b. the price of a good is greater than the marginal cost of producing it. c. the price of a good is equal to the marginal cost of producing it. d. the greatest quantity of output is available for sale.