Appendix: When using a multiplicative power function (Y = a X1b1X2b2X3b3) to represent an economic relationship, estimates of the parameters (a, and the b's) using linear regression analysis can be obtained by first applying a ____ transformation to convert the function to a linear relationship
a. semilogarithmic
b. double-logarithmic
c. reciprocal
d. polynomial
e. cubic
b
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Aggregate demand is the sum of total domestic spending by the private sector.
Answer the following statement true (T) or false (F)
A decrease in aggregate demand tends to cause a ____ a short run Phillips curve at first, then cause a ____ in the short run Phillips curve as people adjust their expectations. a. Movement up along; upward shift
b. Movement up along; downward shift. c. Movement down along; upward shift. d. Movement down along; downward shift.
Which of the following is an implicit cost?
a. salaries paid to owners who work for their own firm b. interest on money borrowed to finance equipment purchases c. cash payments for raw materials d. wages paid to hourly employees e. foregone rent on office space owned and used by the firm
In the short-run macro model, an increase in government spending
a. may reduce real GDP b. partially crowds out private investment spending c. usually crowds out exports d. usually crowds out spending on services e. requires an increase in taxes