Instrumental Variables regression uses instruments to
A) establish the Mozart Effect.
B) increase the regression R2.
C) eliminate serial correlation.
D) isolate movements in X that are uncorrelated with u.
Answer: D) isolate movements in X that are uncorrelated with u.
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By the accelerator hypothesis, if a firm's actual sales jump in one period to a higher maintained level, that firm's capital stock
A) also jumps in one period to a higher maintained level. B) gradually drifts upward to a higher maintained level. C) jumps upward and then falls back to zero. D) jumps upward and then falls back part of the way.
Countercyclical fiscal policy can
a. only be employed in reaction to an existing recession b. only be employed in reaction to an existing boom c. be employed to prevent a potential recession or boom or in reaction to an existing recession or boom d. only be employed to prevent a potential boom e. only be employed to prevent a potential recession
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the net nonreserve international borrowing/lendingand monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The net nonreserve international borrowing/lending balancebecomes more positive (or less negative) and monetary base rises. b. The net nonreserve international borrowing/lending balancebecomes more negative (or less positive) and monetary base falls. c. The net nonreserve international borrowing/lending balancebecomes more positive (or less negative) and monetary base stays the same. d. The net nonreserve international borrowing/lending balanceand monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The minimum wage laws seek to
A) penalize employers that are not complying with labor laws. B) assure a minimum standard of payment for work. C) assure that all workers are paid the same wage rate. D) help teenagers find work.