The concept of exogeneity is important because
A) it clarifies whether or not the variable is determined inside or outside your model.
B) maximum likelihood estimation is no longer valid.
C) under strict exogeneity, OLS may not be efficient as an estimator of dynamic causal effects.
D) endogenous variables are not stationary, but exogenous variables are.
Answer: C
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What will be an ideal response?
Monetarists believe that the type of monetary policy that would lead to greater economic stability is
A) a money supply rule. B) a constant money supply. C) a counter-cyclical monetary policy. D) a pro-cyclical monetary policy.
Use the information in Scenario 4.2. At what price, if any, is the demand for artichokes completely elastic?
A) 50 B) 30 C) 10 D) 0 E) none of the above
According to the theory of rational expectations, the government can influence output
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