An omitted variable is a variable that:
A) is purposely left out as it does not aid an economic analysis.
B) does not cause other variables in a study to change when it changes.
C) is removed from a study as it can lead to the problem of reverse causality.
D) has been left out, and if included, would explain why the variables considered in a study are correlated.
D
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If the price of a good increases and the total revenue also increases, the good has a(n)
A) elastic demand. B) inelastic demand. C) unit elastic demand. D) perfectly elastic demand.
For a private closed economy, an unintended decline in inventories suggests that:
A. aggregate expenditures are less than the business sector expected them to be. B. aggregate expenditures exceed production. C. actual investment exceeds saving. D. planned investment is greater than consumption.