Classical economists believed that
a. the government should play an active role in controlling the economy
b. the government can best help the economy by leaving it alone
c. the economy is controlled by the government
d. laissez faire will hurt the economy
e. economists should offer guidance to governmental leaders
B
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If Xt and Yt are cointegrated, then the OLS estimator of the coefficient in the cointegrating regression is
A) BLUE. B) unbiased when using HAC standard errors. C) unbiased even in small samples. D) consistent.
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the
a. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year. c. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. d. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year.