Under the VAR assumptions, the OLS estimators are
A) consistent and have a joint normal distribution even in small samples.
B) BLUE.
C) consistent and have a joint normal distribution in large samples.
D) unbiased.
Answer: C
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According to the classical theory of international trade
A) only countries with low wages will export. B) only countries with high wages will import. C) countries with high wages will have higher relative prices of all goods. D) All the above are false.
When John earned $65,000 he purchased 10 DVDs a year. His income has just increased to $68,000 and he plans to purchase 15 DVDs this year. John's income elasticity of demand equals
A) 0. B) 0.11. C) 1.67. D) 8.87.
Answer the following statements true (T) or false (F)
1) During the past ten years, the annual rate of inflation in the United States has averaged less than 1 percent. 2) If the price level doubled in a 23-year period, we can conclude that the average annual rate of inflation over that period was about 3 percent. 3) Unanticipated inflation benefits debtors at the expense of creditors. 4) Unanticipated inflation helps some groups in the economy. 5) If the nominal interest rate is 8 percent and the real interest rate is 5 percent, then the inflation premium is 13 percent.
In the efficiency wage model, an increase in productivity would
A. increase output but have no effect on the real wage. B. decrease the real wage but have no effect on output. C. have no effect on either output or the real wage. D. increase output but decrease the real wage.