Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 24, Problem 53CTQ
The AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both
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We want identify the effect of years of education on wage. In the dataset, educ (X) is
measured in years, and wage (Y) is defined as hourly wage and measured in dollars.
Specifically, we want to estimate
=
wage Boẞ₁educ + u
Assume E(u) = E(u|educ) = 0
The regression result is shown on the table below.
.
reg wage edu
Source
SS
df
MS
Number of obs
797
F(1, 795)
274.52
Model
Residual
54070.9621
156590.357
1 54070.9621
795 196.969002
Prob F
0.0000
R-squared
Total
210661.319
796 264.649898
Adj R-squared. =
Root MSE
0.2557
14.035
wage
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
educ
_cons
3.045239
-17.81018
.183797
2.677142
16.57
0.000
2.684455
-6.65
0.000
-23.06528
3.406024
-12.55507
Choose all correct answers
00
The sample covariance between wage and education is positive
The sum of squared residuals is greater than the explained sum of squares.
An individual with 12 years of education has a lower wage than an individual with 16 years of
education
An individual with 0 years of education…
The following regression shows the relationship between government expenditure
meansured in dollars and the number of public servants.
•
reg n_public_servants gov_exp
Source
SS
df
MS
Model
Residual
56219109.3
10197903.6
1 56219109.3
2,998 3401.56892
Number of obs
F(1, 2998)
Prob > F
R-squared
=
=
3,000
16527.41
=
0.0000
=
0.8465
Total
66417012.9
2,999 22146.3864
Adj R-squared
Root MSE
=
0.8464
=
58.323
n_public_SNS
Coefficient Std. err.
t
P>|t|
[95% conf. interval]
gov_exp
_cons
.0003063
64.35881
2.38e-06 128.56 0.000
1.864146 34.52 0.000
.0003017
60.70367
.000311
68.01394
Choose all correct answers
A $10,000 increase in government expenditure is associated with an increase of approximately 3
public servants.
The population covariance between government expenditure and the number of public servants is
positive
Suppose government expenditure is zero; then, according to the regression results, there would be no
public servants.
The sum of squared residuals is less than the explained sum…
Choose all correct answers for the following sample regression model
Yi = ßo + ß1xi +ŵi
ẞ₁ = B₁
u are more likely to be positive than negative
Bo = Bo
The sample regression model represents each data points in the sample data
Chapter 24 Solutions
Principles of Economics 2e
Ch. 24 - Describe the mechanism by which supply creates its...Ch. 24 - Describe the mechanism by which demand creates its...Ch. 24 - The short run aggregate supply curve was...Ch. 24 - In the AD/AS model, what prevents the economy from...Ch. 24 - Suppose the U.S. Congress passes significant...Ch. 24 - Suppose concerns about the size of the federal...Ch. 24 - How would a dramatic increase in the value of the...Ch. 24 - Suppose Mexico, one of our largest trading...Ch. 24 - A policymaker claims that tax cuts led the economy...Ch. 24 - Many financial analysts and economists eagerly...
Ch. 24 - What impact would a decrease in the size of the...Ch. 24 - Suppose, after five years of sluggish growth, the...Ch. 24 - Suppose the Federal Reserve begins to Increase the...Ch. 24 - If the economy is operating in the neoclassical...Ch. 24 - If the economy is operating In the Keynesian zone...Ch. 24 - What is says law?Ch. 24 - What is Keynes; law?Ch. 24 - Do neoclassical economists believe in Keynes law...Ch. 24 - Does Says law apply more accurately in the long...Ch. 24 - What is on the horizontal axis of the AD/AS...Ch. 24 - What is the economic reason why the SRAS curve...Ch. 24 - What are the components of the aggregate demand...Ch. 24 - What are the economic reasons why the AD curve...Ch. 24 - Briefly explain the reason for the near-horizontal...Ch. 24 - Briefly explain the reason for the near-vertical...Ch. 24 - What is potential GDP?Ch. 24 - Name some factors that could cause the SRAS curve...Ch. 24 - Will the shift of SRAS to the right tend to make...Ch. 24 - What is stagflation?Ch. 24 - Name some factors that could cause AD to shift,...Ch. 24 - Would a shift of AD to the right tend to make the...Ch. 24 - How is long-term growth illustrated in an AD/AS...Ch. 24 - How is recession illustrated in an AD/AS model?Ch. 24 - How is cyclical unemployment illustrated in an...Ch. 24 - How is the natural rate of unemployment...Ch. 24 - How is pressure for inflationary price increases...Ch. 24 - What are some of the ways in which exports and...Ch. 24 - What is the Keynesian zone of the SRAS curve? How...Ch. 24 - What is the neoclassical zone of the SRAS curve?...Ch. 24 - What is the intermediate zone of the SRAS curve?...Ch. 24 - Why would an economist choose either the...Ch. 24 - On a microeconomic demand curve, a decrease in...Ch. 24 - Economists expect that as the labor market...Ch. 24 - If new government regulations require firms to use...Ch. 24 - During spring 2016 the Midwestern United States,...Ch. 24 - Hydraulic fracturing (tracking) has the potential...Ch. 24 - Some politicians have suggested tying the minimum...Ch. 24 - If households decide to save a larger portion of...Ch. 24 - If firms become more optimistic about the future...Ch. 24 - If Congress cuts taxes at the same time that...Ch. 24 - Suppose the level of structural unemployment...Ch. 24 - If foreign wealth-holders decide that the United...Ch. 24 - The AD/AS model is static. It shows a snapshot of...Ch. 24 - Explain why the short-run aggregate supply curve...Ch. 24 - Explain why the short-run aggregate supply curve...Ch. 24 - Why might it be important for policymakers to know...Ch. 24 - In your view, is the economy currently operating...Ch. 24 - Are Says law and Keynes law necessarily mutually...Ch. 24 - Review the problem in the Work It Out titled...Ch. 24 - The imaginary country of Harris Island has the...Ch. 24 - Table 24.4 describes Santhers economy. Plot the...
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