Refer to the above graphs. A short-run equilibrium that would produce losses for a monopolistically competitive firm would be represented by graph:

The Phillips curve shows a negative relationship between the:

a. consumption rate and the unemployment rate. b. savings rate and the inflation rate. c. interest rate and the savings rate. d. inflation rate and the unemployment

Which of the following correctly identifies a limitation of logarithmic transformation of variables?

A. Taking log of variables make OLS estimates more sensitive to extreme values in comparison to variables taken in level. B. Logarithmic transformations cannot be used if a variable takes on zero or negative values. C. Logarithmic transformations of variables are likely to lead to heteroskedasticity. D. Taking log of a variable often expands its range which can cause inefficient estimates.