Which of the following statements is true?
A. In large samples there are not many discrepancies between the outcomes of the F test and the LM test.
B. Degrees of freedom of the unrestricted model are necessary for using the LM test.
C. The LM test can be used to test hypotheses with single restrictions only and provides inefficient results for multiple restrictions.
D. The LM statistic is derived on the basis of the normality assumption.
Answer: A
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A. decrease aggregate supply. B. promote saving and investment. C. reduce government spending. D. increase aggregate demand.
Based on the model of the money market, when real GDP increases, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the supply of money increases.
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A) the lower is the maximum willingness to pay of each bidder B) the smaller is the consumer surplus earned by the winner C) the larger is the quantity offered by the auctioneer for auction D) the lower is the value of the starting bid
In monopolistic competition, which of the following is a result of product differentiation?
a. inefficiency b. efficiency c. low profits d. zero profits