The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education.
Savings = ?0 + 
0 Edu + ?1Inc + u
The variable ‘Edu' takes a value of 1 if the person is educated and the variable ‘Inc' measures the income of the individual.
?
Refer to the model above. The benchmark group in this model is _____.
A. the group of educated people
B. the group of uneducated people
C. the group of individuals with a high income
D. the group of individuals with a low income
Answer: B
Economics
You might also like to view...
Hyperinflation is usually accompanied by a great macroeconomic expansion
a. True b. False Indicate whether the statement is true or false
Economics
Total utility
a. can never be negative b. is maximized when marginal utility is maximized c. always continues to increase as more of the good is consumed d. is maximized when marginal utility is zero e. is minimized when marginal utility is zero
Economics