Sample selection bias
A) occurs when a selection process influences the availability of data and that process is related to the dependent variable.
B) is only important for finite sample results.
C) results in the OLS estimator being biased, although it is still consistent.
D) is more important for nonlinear least squares estimation than for OLS.
Answer: A
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Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and reserve-related (central bank) transactions remain the same. b. Real GDP and reserve-related (central bank) transactions remain the same. c. Real GDP rises, and reserve-related (central bank) transactions remain the same. d. There is not enough information to determine what happens to these two macroeconomic variables.