John Maynard Keynes stated that “In the long run we are all dead!” Explain what he meant by this.
What will be an ideal response?
Keynes was made this statement to criticize economists who believed the federal government should not intervene in the economy during a recession. Some economists argued that the government should not focus on short-term problems with the economy, but rather on the long-run. Keynes argued that the short-term is also important.
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A single-price monopoly has a marginal revenue curve that is
A) horizontal and equal to price. B) downward sloping and lies below the demand curve. C) upward sloping and is the same as its supply curve. D) downward sloping and lies above the demand curve. E) vertical at the profit-maximizing quantity.
Which of the following correctly identifies a limitation of logarithmic transformation of variables?
A. Taking log of variables make OLS estimates more sensitive to extreme values in comparison to variables taken in level. B. Logarithmic transformations cannot be used if a variable takes on zero or negative values. C. Logarithmic transformations of variables are likely to lead to heteroskedasticity. D. Taking log of a variable often expands its range which can cause inefficient estimates.