You try to explain the number of IBM shares traded in the stock market per day in 2005. As an independent variable you choose the closing price of the share. This is an example of
A) simultaneous causality.
B) invalid inference due to a small sample size.
C) sample selection bias since you should analyze more than one stock.
D) a situation where homoskedasticity-only standard errors should be used since you only analyze one company.
Answer: A) simultaneous causality.
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The case of New Zealand, described in the text, is concerned with the country's
A) prospects for long term growth. B) ability to sustain current account deficits. C) unproductive industrial sector and its prospects for long run growth. D) labor productivity. E) exchange rate volatility relative to other currencies.
In Macroland there is $12,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If banks' desired reserve/deposit ratio is 12.5%, deposits in Macroland equal ________ and the money supply equals ________.
A. $96,000,000; $96,000,000 B. $48,000,000; $54,000,000 C. $54,000,000; $54,000,000 D. $48,000,000; $75,000,000