All of the following are good reasons for an applied econometrician to learn some econometric theory, with the exception of
A) turning your statistical software from a "black box" into a flexible toolkit from which you are able to select the right tool for a given job.
B) understanding econometric theory lets you appreciate why these tools work and what assumptions are required for each tool to work properly.
C) learning how to invert a 4×4 matrix by hand.
D) helping you recognize when a tool will not work well in an application and when it is time for you to look for a different econometric approach.
Answer: C
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Increasing marginal returns to labor
A) occur when a particularly efficient worker is employed. B) describe the portion of a total product curve where the marginal product is negative. C) mean that two workers produce less than twice the output of one worker. D) are the result of specialization and division of labor in the production process. E) occur only when there are increasing marginal returns to capital.
Governments usually accept goods inflation as long as it stays low, which for the United States currently means around:
A. 5.5 to 6 percent. B. 3.5 to 4 percent. C. 1 to 2.5 percent. D. 7.5 to 8 percent.