What are the trade-offs involved in shortening the length of a patent for pharmaceuticals?
What will be an ideal response?
On the one hand, shortening the length of a patent will lead to reduced profits by drug companies and increased competition, meaning lower prices for consumers. On the other hand, reducing this legal monopoly period will reduce the incentive to invest in research and development, and fewer pharmaceuticals may be invented.
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By including another variable in the regression, you will
A) decrease the regression R2 if that variable is important. B) eliminate the possibility of omitted variable bias from excluding that variable. C) look at the t-statistic of the coefficient of that variable and include the variable only if the coefficient is statistically significant at the 1% level. D) decrease the variance of the estimator of the coefficients of interest.
To try to eliminate a recessionary gap the Fed typically__________ the money supply, and to try to eliminate an inflationary gap the Fed typically __________ the money supply
A) increases; decreases B) increases; increases C) decreases; increases D) decreases; decreases
If an economy that produces capital and consumer goods is operating at a point on its production possibilities curve:
A. the economy is incapable of achieving significant economic growth. B. it is achieving full employment but not full production. C. more capital goods can be produced only at the cost of some consumer goods. D. it is achieving full production but not full employment.
If GDP is too high relative to potential GDP, which of the following happens?
A. Inflation rises B. Unemployment rises C. A recession begins D. Deflation occurs