The opportunity cost of the U.S. producing tea or coffee is measured by the value of the foregone production alternative—manufacturing or staples

Interpreting the intercept in a sample regression function is

A) not reasonable because you never observe values of the explanatory variables around the origin. B) reasonable because under certain conditions the estimator is BLUE. C) reasonable if your sample contains values of Xi around the origin. D) not reasonable because economists are interested in the effect of a change in X on the change in Y.

Explain the effects of the following actions on equilibrium income. 1 . Government purchases rise by $20 billion. 2 . Taxes fall by $20 billion. Assume that the marginal propensity to consume is 0.8