Exam 2: Economic Methods and Economic Questions

A) Increased government spending lowers the unemployment rate in an economy but can lead to inflation.
B) Based on a local survey of a small town, it was argued that greater opportunities to work from home are the prime cause of obesity among the elderly workforce in the country.
C) The average annual earnings of high school dropouts in the United States was much less than that of graduates in 2015.
D) A health survey of preschoolers in Mexico showed that the average height of preschoolers is between 3.5 feet and 4 feet.

Correct Answer

verified

Show Answer

Correct Answer

verified

No,correlation does not always imply cau...

View Answer

Show Answer

A) The relationship between hourly wages and a worker's productivity
B) The growth in consumer income over 5 years
C) The contribution of each sector to the total output of an economy
D) The different sources of tax revenue for the government

Correct Answer

verified

Show Answer

Correct Answer

verified

The treatment group refers to the group ...

View Answer

Show Answer

A) Testing a hypothesis does not require data, whereas testing a model requires data.
B) Testing a model requires data, whereas testing a hypothesis does not require data.
C) A hypothesis can be used to make predictions for the future, whereas a model can only explain the past.
D) A model is a simplified representation of reality, whereas hypotheses are a model's predictions.

Correct Answer

verified

Show Answer

A) The predictions of a model are referred to as data.
B) A model is formulated after developing a hypothesis.
C) Models are always based on assumptions that are known to be true.
D) It is more important for a model to be simple and useful than to be precisely accurate.

Correct Answer

verified

Show Answer

A) uncorrelated
B) equivalent
C) positively correlated
D) negatively correlated

Correct Answer

verified

Show Answer

A) is often based on simplifying assumptions that are not necessarily true
B) can be tested without data or statistics
C) is a more complex representation of reality than a theory
D) can never be used to predict the future, but it helps explain the past

Correct Answer

verified

Show Answer

A) Experiments are restricted to laboratories.
B) Experiments are carried out only in the study of economics.
C) Experiments help determine cause and effect between variables.
D) Experiments require the division of participants into a treatment group and a test group.

Correct Answer

verified

Show Answer

A) Adverse causality
B) Reverse causality
C) Omitted variable bias
D) Limited information bias

Correct Answer

verified

Show Answer

A) Models that economists use are perfect replicas of reality.
B) The scientific method used by economists is based on idealism and not empiricism.
C) Models help economists explain the past but do not help predict the future.
D) Testing with data enables economists to distinguish between good models and bad models.

Correct Answer

verified

Show Answer

A) Correlation occurs when one thing directly affects another, whereas causation implies a mutual relationship between two things.
B) Correlation implies a mutual relationship between two things, whereas causation occurs when one thing directly affects another.
C) A causal relationship exists between two variables when they are correlated, but correlation does not necessarily exist if there's a causal relationship between two variables.
D) Causation cannot arise when correlation is present, and correlation cannot arise when causation is present.

Correct Answer

verified

Show Answer

A) The mean is equal to zero when all the values are identical.
B) The mean is a commonly used technique for summarizing data.
C) The mean is less than all the individual observations in the data set.
D) The mean is calculated as the sum of all values multiplied by the number of values.

Correct Answer

verified

Show Answer

A) study group and a control group
B) treatment group and a test group
C) study group and a treatment group
D) treatment group and a control group

Correct Answer

verified

Show Answer

A) The predictions of this model can be verified empirically.
B) The predictions of this model can only be applied for a limited number of years of additional education.
C) According to the model, 2 additional years of education will increase an individual's future wages 1.20 times.
D) According to the model, 2 additional years of education will increase an individual's future wages 2.98 times.

Correct Answer

verified

Show Answer

A) A histogram
B) A bar chart
C) A scatter plot
D) A time series graph

Correct Answer

verified

Show Answer

A) A good economic question can be answered.
B) A good economic question should always have a single solution.
C) A good economic question always addresses topics that are important to the whole society and not to an individual economic agent.
D) A good economic question should never incorporate elements from disciplines other than economics.

Correct Answer

verified

Show Answer

A) The model is not based on any assumption.
B) The predictions of the model are mostly wrong.
C) The predictions of the model will hold in most cases but not all.
D) The predictions of the model cannot be tested with data.

Correct Answer

verified

Show Answer