Which of the following is a drawback of including proxy variables in a regression model?

A. It leads to misspecification analysis.
B. It reduces the error variance.
C. It increases the error variance.
D. It exacerbates multicollinearity.

Answer: D

Economics

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Which of the following was NOT a part of Chandler's (1977) description of the rise of big business in the 19th century?

(a) Vertical integration of firms (b) The development of mass production (c) The development of mass distribution (d) The use of central planning to improve production techniques

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If C = 2000 + .9YD, what decrease in taxes must occur for equilibrium output to increase by 1000?

A) 111 B) 100 C) 1000 D) 500

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