Consider the following simple regression model y = 
0 + 1x1 + u. The variable z is a poor instrument for x if _____.
A. there is a high correlation between z and x
B. there is a low correlation between z and x
C. there is a high correlation between z and u
D. there is a low correlation between z and u
Answer: B
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This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
If Sarah and Joe are working on a project together and faced with the choices outlined in the figure shown, we can predict the outcome will be that:
A. both Joe and Sarah put forth low effort.
B. Joe will put forth high effort, and Sarah will put forth low effort.
C. Joe will put forth low effort, and Sarah will put forth high effort.
D. both Joe and Sarah put forth high effort.
IMF refers to the International Market Fund
Indicate whether the statement is true or false
Which of the following is not an example of a price index computed by the Bureau of Labor Statistics?
a. the Los Angeles price index b. the energy price index c. the producer price index d. the stock price index
State governments’ main source of revenue is
A. property taxes. B. income taxes. C. excise taxes. D. sales taxes.