Volatility clustering
A) is evident in most cross-sections.
B) implies that a series is serially correlated.
C) can mostly be found in studies of the labor market.
D) is evident in many financial time series.
Answer: D
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Intra-industry trade will tend to dominate trade flows when which of the following exists?
A) small differences between relative country factor availabilities B) large differences between relative country factor availabilities C) homogeneous products that cannot be differentiated D) constant cost industries E) uneven distribution of abundant resources between two countries
Firms in long-run equilibrium in a perfectly competitive industry will produce at the low points of their average total cost curves because:
a. free entry implies that long-run profits will be zero no matter how much each firm produces. b. firms seek maximum profits and to do so they must choose to produce where average costs are minimized. c. firms maximize profits and free entry implies that maximum profits will be zero. d. firms in the industry desire to operate efficiently.