Which of the following statements is true?
A) Correlation can only arise when causation is not present.
B) Causation can only arise when correlation is not present.
C) Causation arises when there is correlation between two variables, and can also arise even when there is no correlation.
D) Correlation arises when there is causation and can also arise even when there is no causation.
D
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A New Keynesian firm produces the output at which
A) marginal revenue equals zero. B) marginal cost equals zero. C) its selling price equals marginal cost. D) marginal revenue equals marginal cost.
Suppose the federal government increases the unemployment benefits financed by higher income taxes. In this case, which of the following is likely to occur?
a. An increase in the equilibrium real GDP b. A redistribution of disposable income from the employed to the unemployed c. An increase in the interest rate d. An increase in the discount rate charged by the Central Bank e. An increase in the income of the rich and a decrease in the income of the poor