An economist wants to study the effect of income on savings. He collected data on 120 identical twins. Which of the following methods of estimation is the most suitable method, if income is correlated with the unobserved family effect?
A. Random effects estimation
B. Fixed effects estimation
C. Ordinary least squares estimation
D. Weighted Least squares estimation
Answer: B
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Which of the following events will increase the quantity demanded of bottled water?
A) a fall in the price of bottled water B) a rise in the price of bottled water C) a rise in the price of a fitness club membership D) a fall in the price of soda E) an increase in the number of buyers of bottled water
The benefits to a country from dollarization include each of the following, except:
A. a lower risk premium since inflationary finance is no longer a possibility. B. no risk of an exchange rate crisis. C. greater and faster integration into world markets, increasing trade and investment. D. increased revenue from seignorage.
Suppose farmers get together and decide to be less productive. They want to do this so that they can shift the supply curve of farm products leftward and raise the price. They must be assuming that the demand curve between the current price and the higher price is
A) inelastic. B) elastic. C) unit elastic. D) There is not enough information to answer this question.
Which of the following is an example of a transfer payment?
a. wages paid to military personnel
b. benefits paid to Social Security recipients
c. purchase of aircraft by the Department of Defense
d. payments made to a contractor for construction of a highway