A two-way network that links users and in which the per-unit value of the service increases as the size of the network increases is a:
A. negative externality known as a direct network externality.
B. positive externality known as a direct network externality.
C. negative externality known as an indirect network externality.
D. positive externality known as an indirect network externality.
Answer: B
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Under a fixed exchange rate system, if an appreciation in the value of a country's currency develops, the monetary authorities must intervene by ________
A) selling foreign exchange B) buying and selling the domestic currency C) raising the foreign interest rate D) buying foreign exchange
The lending facility that allows any bank to borrow reserves from the Fed is called the:
A. discount window. B. reserve window. C. reserve rate. D. borrower of last resort.
If the average cost of producing 10 sweaters is $6.50 and the marginal cost of producing the tenth sweater is $6.75, the average cost of producing 10 sweaters will be:
A. less than $6.50. B. $6.50. C. exactly $6.75. D. more than $6.50.
Economic theory provides a basis for which variables are relevant and should be included in an econometric model. But econometrics provides tools to estimate ____ which tells us ____.
a. a model; the functional form that should be used b. causality; why it happens that way c. a parameter; how much or to what degree things change d. variables; the probability of a specific outcome