Which of the following types of variables cannot be included in a fixed effects model?

A permanent increase of borrowing by the U.S. Treasury to finance growing budget deficits will:

A. result in U.S. Treasury yields being higher than high-grade corporate bonds. B. result in lower yields on corporate bonds. C. cause the yield on U.S. Treasury bonds to increase, but still be lower than corporate bonds. D. result in the price of U.S. Treasury bonds rising.

Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. Which of the following statements is TRUE?

A. An increase in price will occur quicker in the capture hypothesis than the share-the-gains, share-the-pain theory. B. An increase in price will occur quicker in the share-the gains, share-the-pain theory than the capture hypothesis. C. Under both the capture hypothesis and the share-the-gains, share-the-pain theory profits will decrease. D. In the capture hypothesis there will be an increase in price but not in the share-the-gains, share-the-pain theory.