Idiosyncratic error is the error that occurs due to _____.
A. incorrect measurement of an economic variable
B. unobserved factors that affect the dependent variable and change over time
C. unobserved factors that affect the dependent variable and do not change over time
D. correlation between the independent variables
Answer: B
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If in the third quarter of 2016 total investment spending was $4,768 billion and depreciation was $3,292 billion, then the amount counted in GDP, which is known as gross investment, would be
A) $1,476 billion. B) $3,292 billion. C) $4,768 billion. D) $8,060 billion.
A manager invests $400,00 . in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . Ceteris peribus, if the firm continues its production in the same economic environment, the firms economic profits should
a. increase b. decrease c. stay the same d. increase as long as the investment does not generate implicit costs that are greater than $0.15 per unit