If only one of the independent variables has a measurement error, which of the following is generally true under the classical errors-in-variables (CEV) assumption?
A. The OLS estimators for coefficients on all other independent variables are also biased towards zero.
B. The OLS estimators for coefficients on all other independent variables are still unbiased and consistent.
C. The OLS estimators for coefficients on all other independent variables are also biased and inconsistent.
D. The OLS estimators for coefficients on all other independent variables are biased but consistent.
Answer: C
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Suppose a small closed economy has GDP of $5 billion, consumption of $3 billion, and government expenditures of $1 billion. Then investment and national saving are both $1 billion
a. True b. False Indicate whether the statement is true or false
The cross-price elasticity of demand measures:
A. the relationship between the demand for one good and the supply of another. B. the relationship between the demand for one good and the price of another. C. the relationship between the demand and supply of one good at the intersection of the curves. D. the elasticity of demand at the intersection of the supply and demand curves.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles. B. an increase in economic growth. C. an increase in unemployment. D. a reduction in unemployment.
When analyzing the effects of government spending, net taxes, and the Z factors, what primarily matters is the shape of
A. both the AD curve and the AS curve. B. neither the AD curve nor the AS curve. C. the AD curve. D. the AS curve.