Which of the following statements is true of confidence intervals?
A. Confidence intervals in a CLM are also referred to as point estimates.
B. Confidence intervals in a CLM provide a range of likely values for the population parameter.
C. Confidence intervals in a CLM do not depend on the degrees of freedom of a distribution.
D. Confidence intervals in a CLM can be truly estimated when heteroskedasticity is present.
Answer: B
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Other things the same, if the real interest rate in a country falls, domestic residents will desire to purchase
a. more capital goods and more foreign bonds. b. more capital goods but fewer foreign bonds. c. more foreign bonds but fewer capital goods. d. fewer capital goods and fewer foreign bonds.
The price of one piece of pizza is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 pieces of pizza and receiving 20 utils for the last piece. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goods
A. is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good. B. is not an optimum because the marginal utility per dollar spent is greater for pizza than for movies. C. is an optimum since the entire income is spent and total utility is minimized. D. is not an optimum because the consumer has not spent all of his money.