Suppose That the Australian Economy Initially Uses 50 Billion Hours

question 134

Multiple Choice

Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP.If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,

• A)Australia's production function exhibits diminishing returns.
• B)Australia's production function exhibits increasing returns.
• C)Australia has an Okun Wedge of $1 trillion.
• D)Australia has positive Lucas Wedge.
• E)Australia's production possibility frontier has a positive slope.

Interpret confidence and prediction intervals within the context of linear regression.

Identify the appropriate statistical test for hypotheses concerning the slope in linear regression.

Analyze and interpret scatter plots and residual plots for assessing the fit of a linear regression model.

Calculate and interpret the slope and intercept of the least-squares regression line.

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Definitions:

Foreign Currencies

Different countries' monetary units, which are exchanged in the foreign exchange market.

British Pound

The currency of the United Kingdom, used in Great Britain and Northern Ireland.

Uncovered Interest Parity

An economic theory that states the difference in interest rates between two countries equals the expected change in exchange rates between those countries' currencies.

Exchange Rate

The price of one country's currency expressed in another country's currency.