Which of the following is assumed for establishing the unbiasedness of Ordinary Least Square (OLS) estimates?
A. The error term has an expected value of 1 given any value of the explanatory variable.
B. The regression equation is linear in the explained and explanatory variables.
C. The sample outcomes on the explanatory variable are all the same value.
D. The error term has the same variance given any value of the explanatory variable.
Answer: B
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If real GDP for 2009 is $6400 billion and nominal GDP for 2010 is $6720 billion (in 2010 dollars), then the growth rate of real GDP is
A) 0%. B) 0.5%. C) 5%. D) unknown based on the given information.
The general equilibrium analysis of a minimum wage applied to only some sectors of the economy suggests that
A) workers in all sectors will face increased wages. B) some workers in the covered sectors will lose their jobs and remain unemployed. C) some workers originally employed in the covered sectors will move to the uncovered sectors, driving down wages in the uncovered sectors. D) all workers will be worse off.
Determinants of the marginal productivity of labor include all of the following EXCEPT
A) talent. B) education. C) experience. D) location.
We would expect which of the following to occur when the central bank conducts an open market purchase of bonds?
A) a reduction in the monetary base (H) B) a reduction in the money multiplier C) an increase in the money multiplier D) an increase in the money supply