Related to the Economics in Practice on page 666: Trade ________ comparative advantage of countries and ________ the efficiency of firms.
A. exploits; reduces
B. inhibits; reduces
C. inhibits; improves
D. exploits; improves
Answer: D
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(Requires Internet Access for the test question) The following question requires you to download data from the internet and to load it into a statistical package such as STATA or EViews
a. Your textbook estimates an AR(1) model (equation 14.7) for the change in the inflation rate using a sample period 1962:I — 2004:IV. Go to the Stock and Watson companion website for the textbook and download the data "Macroeconomic Data Used in Chapters 14 and 16." Enter the data for consumer price index, calculate the inflation rate, the acceleration of the inflation rate, and replicate the result on page 526 of your textbook. Make sure to use heteroskedasticity-robust standard error option for the estimation. b. Next find a website with more recent data, such as the Federal Reserve Economic Data (FRED) site at the Federal Reserve Bank of St. Louis. Locate the data for the CPI, which will be monthly, and convert the data in quarterly averages. Then, using a sample from 1962:I — 2009:IV, re-estimate the above specification and comment on the changes that have occurred. c. Based on the BIC, how many lags should be included in the forecasting equation for the change in the inflation rate? Use the new data set and sample period to answer the question. What will be an ideal response?
Which of the following is most likely to be a monopoly?
A) AOL (America On Line), an Internet service provider B) WABC, a television station C) The Washington Post D) a public water utility
Which type of money has the lowest opportunity cost?
a. Silver coins b. Gold coins c. Commodity money d. Diamonds e. Fiat money
Regardless of the index we use:
A. inflation is measured as a percent increase in the index from one year to the next. B. we get the same measurements for inflation, so each is equally useful. C. the measurement of inflation is the same, so we use the one easiest to calculate. D. we should get an accurate picture of how all consumer goods and services prices changed from year to year.