Which of the following will cause the LM curve to shift to the left?
A) A decrease in investment
B) A decrease in money demand
C) An increase in velocity
D) A decrease in the money supply
D
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When you have an omitted variable problem, the assumption that E(ui Xi) = 0 is violated. This implies that
A) the sum of the residuals is no longer zero. B) there is another estimator called weighted least squares, which is BLUE. C) the sum of the residuals times any of the explanatory variables is no longer zero. D) the OLS estimator is no longer consistent.
Under which of the following market conditions is it most difficult to maintain a cartel agreement?
a. There are many firms in the industry and these firms have similar costs. b. There are many firms in the industry and these firms have different costs. c. There are few firms in the industry and these firms have similar costs. d. There are few firms in the industry and these firms have different costs.