The U.S. dollar is one of the leading reserve currency in the world. This means that
A) dollars are often used to settle international debts and to state other currency exchange values.
B) dollars are the most common currency for savings internationally.
C) dollars are held to cover shortfalls in government budgets.
D) dollars are accepted in just about every country in the world.
A
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Under imperfect multicollinearity
A) the OLS estimator cannot be computed. B) two or more of the regressors are highly correlated. C) the OLS estimator is biased even in samples of n > 100. D) the error terms are highly, but not perfectly, correlated.
Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.75, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of $1,000 billion aggregate demand can restore full employment, the government should:
a. increase spending by $250 billion. b. decrease spending by $750 billion. c. increase spending by $1,000 billion. d. increase spending by $750 billion.
The problem of double coincidence of wants is associated with: a. paper money. b. insurance
c. credit cards. d. barter system.
Progressive income taxes are designed to
a. make the distribution of income less equal. b. leave unchanged the distribution of income. c. let the market determine the distribution of income after taxes. d. make the distribution of income more equal.