A positive externality occurs when
a. Jack receives a benefit from John's consumption of a certain good.
b. Jack receives personal benefits from his own consumption of a certain good.
c. Jack's benefit exceeds John's benefit when they each consume the same good.
d. Jack's receives a loss from John's consumption of a certain good.
a
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The presence of correlated error terms creates problems for inference based on OLS. These can be overcome by
A) using HAC standard errors. B) using heteroskedasticity-robust standard errors. C) reordering the observations until the correlation disappears. D) using homoskedasticity-only standard errors.
Which of the following is true?
a. Inflation and unemployment rates can both increase in the short run in response to negative supply shocks. b. Inflation and unemployment rates cannot both decrease in the short run in response to reduced aggregate demand. c. Inflation and unemployment rates can both decrease in the short run in response to positive supply shocks. d. All of the above are true.