The OLS estimator is derived by
A) connecting the Yi corresponding to the lowest Xi observation with the Yi corresponding to the highest Xi observation.
B) making sure that the standard error of the regression equals the standard error of the slope estimator.
C) minimizing the sum of absolute residuals.
D) minimizing the sum of squared residuals.
Answer: D
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Increases in real GDP would overstate the increase in the well-being of a country over time if, over that time period, the
A) price level increased. B) amount of pollution decreased. C) crime rate decreased. D) average hours worked per week increased.
Suppose output for a simple production process is given by Q = K + L, where K denotes capital, and L denotes labor. The price of labor is $2 per unit and the price of capital is $4 per unit. What would be the minimum costs of producing 10 units of output?
A. $10 B. $40 C. $20 D. It is impossible to say with the information given
When a country imposes tariffs, it is likely to cause
A. Lower prices for domestic production. B. Higher prices for the import-competing goods both domestically and abroad. C. Less expensive exports. D. Increased quantities of imports.
Economists studying the impact of direct pegs on trade found that direct pegs:
A) increased levels of trade by 21%. B) increased levels of trade by 44%. C) increased levels of trade by 58%. D) had no effect on trade levels.