EBK EXPLORING MACROECONOMICS
7th Edition
ISBN: 9780100546400
Author: Sexton
Publisher: YUZU
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Question
Chapter 11, Problem 11P
a) Next year's real GDP exceed next year's nominal GDP
To determine
Whether the next year's real
b) Real GDP grow and simultaneously real GDP per capita falls
To determine
If the real GDP can grow and at the same time can the real GDP per capita falls
c) People's real consumption possibilities expand at the same time real GDP per capita falls.
To determine
Can people's real consumption possibilities expand at the same time real GDP per capita falls.
d) How changing amount of leisure complicate comparisons of real well-being over time
To determine
How the changing amount of leisure complicate comparisons of real well-being over time
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Problem 3
Simple Bivariate Regression
Consider the following bivariate regression model:
NAMEUIN
Page 1 of 2
=
Hourly Wages, Bo+B₁Education; + &
where Education measures the years of experience at the job for an individual and
Hourly Wage is the hourly wage in dollars. The subscript i indexes various people. You run
a bivariate OLS regression to estimate Bo and B₁.
Suppose you estimate B = 10 and B
a.
0
= 2
How do you interpret the estimates ßo and ß₁ in this context? (3 points)
1
b. Define the terms "predicted/fitted value" and "residual”. (3 points)
c. Suppose that for some individual, the predicted value of Hourly Wage is $20, and
the residual is 2. What is the actual Hourly wage for the individual? Show your
work. (4 points)
d. Suppose that some individual has 10 years of Education, and his actual hourly wage
is $35. What is the predicted outcome and residual for this individual? Show your
work. (5 points)
Problem 1
The Core Model
Suppose you are interested in studying the effect of workers' training (measured by the
number of training hours) on employee productivity (measured by output per hour).
a. What is the dependent and independent variable in this setting? (2 points)
b. How would you write this relationship using the Core Model? (3 points)
C.
Do you expect the slope coefficient ẞ₁, (which shows relation between teacher's
experience and test scores) to be positive or negative? Explain your reasoning. (5
points)
d. Name any two factors that are likely included in the error term of your model? (5
points)
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