Which of the following conclusions is not supported by the Three-Sector-Model?
a. An increase in a nation's supply of goods and services raises the amount sold per time period and lowers the nation's GDP Price Index.
b. An increase in the demand for a nation's currency in the foreign exchange market raises its international value.
c. An increase in a nation's real risk-free interest rate increases the willingness and ability of lenders/savers to supply credit to the real loanable funds market, and it decreases the willingness and ability of individuals and companies to borrow/invest.
d. An increase in a nation's demand for goods and services within the Classical range usually leads to a strong decrease in the unemployment rate.
.D
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People learn to hold a specific quantity of money for the groceries, theater tickets, gasoline, clothes, film, and other items they habitually purchase. This behavior is representative of the:
a. precautionary demand. b. speculative demand. c. transactions demand. d. volatility demand. e. liquidity demand.
Which of the following most accurately describes the long-run period? a. The long run is a period of time in which a firm is unable to vary some of its factors of production
b. In the long run, the firm is able to expand output by utilizing additional workers and raw materials, but not physical capital. c. The long run is of sufficient length to allow a firm to alter its plant capacity and all other factors of production. d. The long run is of sufficient length to allow a firm to transform economic losses into economic profits.
In long-run equilibrium in a monopolistically competitive market, firms typically: a. earn a normal profit
b. charge a price equal to marginal cost. c. earn an above-normal profit. d. charge a price equal to marginal revenue.
Which of the following assumptions is required for obtaining unbiased random effect estimators?
A. The idiosyncratic errors are heteroskedastic. B. The unobserved effect is independent of all explanatory variables in all time periods. C. The idiosyncratic errors are serially correlated. D. The unobserved effect is correlated with the explanatory variables.