Which of the following assumptions is required for two stages least squares estimation with time series data but not required for two-stage least squares estimation with cross sectional data?
A. The conditional mean of the error term is zero.
B. The error term has constant conditional variance.
C. The model includes at least one dummy variable.
D. The error terms are not serially correlated.
Answer: D
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A good's real price is the:
A. dollar price of the good relative to the average dollar price of all other goods and services. B. average dollar price of the good. C. dollar price of the good relative to the real price of all other goods and services. D. absolute price of the good in dollar terms.
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
By using only the aggregate demand curve, we can determine
A) only the price level. B) only the quantity of real GDP. C) both the price level and quantity of real GDP. D) neither the price level nor the quantity of real GDP.
Microeconomics differs from macroeconomics in that:
a. microeconomics studies individual decision making while macroeconomics examines aggregate decision making. b. microeconomics studies aggregate decision making while macroeconomics examines individual decision making. c. microeconomics utilizes positive economic analysis while macroeconomics utilizes normative economic analysis. d. microeconomics is concerned with consumer behavior while macroeconomics is concerned with firm behavior.