An Improvement in School Quality Translates into an Increase in Which

question 1

Multiple Choice

An improvement in school quality translates into an increase in which model parameter?

• A) H
• B) z
• C) b
• D) 1-u

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Definitions:

Discount Rate

The fee in the form of an interest rate that commercial banks and similar depository organizations incur when they obtain loans from the lending establishment of their regional Federal Reserve Bank.

Required Reserve Ratio

The percentage of deposits that banks must hold in reserve and not lend out to ensure liquidity.

Transfer Payments

Financial distributions by the government to individuals without any expectation of a good or service being provided in return.

Government Securities

Financial instruments issued by a government to borrow money from investors with a promise to pay back with interest.