A seasonal binary (or indicator or dummy) variable, in the case of monthly data,
A) is a binary variable that take on the value of 1 for a given month and is 0 otherwise.
B) is a variable that has values of 1 to 12 in a given year.
C) is a variable that contains 1s during a given year and is 0 otherwise.
D) does not exist, since a month is not a season.
Answer: A
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Countries import some goods and export other goods primarily because of:
A) unemployment. B) self-sufficiency. C) comparative advantage. D) the law of increasing opportunity cost.
Assuming the same coupon rate and maturity length, the difference between the yield on a Treasury Inflation Indexed Security and the yield on a nonindexed Treasury security provides insight into
A) the nominal interest rate. B) the real interest rate. C) the nominal exchange rate. D) the expected inflation rate.