The relationship between a firm's advertising expenditure and its profit is studied under:

If a "break" occurs in the population regression function, then

A) inference and forecasting are compromised when neglecting it. B) an Augmented Dickey Fuller test, rather than the Dickey Fuller test, should be used to test for stationarity. C) this suggests the presence of a deterministic trend in addition to a stochastic trend. D) forecasting, but not inference, is unaffected, if the break occurs during the first half of the sample period.

Which of the following statements is consistent with the views of Joseph Schumpeter?

A) Research and development by competitive firms is responsible for most technological changes. B) An economy benefits from firms having market power because these firms are more likely to be able to commit funds for research and development. C) Enforcement of antitrust laws is necessary to promote competition among firms. D) A lack of competition discourages firms from developing new technologies.