1461 words - 6 pages

Question 1

5 out of 5 points

Which of the following will increase (V0), the shareholder wealth maximization model of the firm:

V0∙(shares outstanding) = Σ∞t=1 (π t ) / (1+ke)t + Real Option Value.

Answer

Selected Answer:

Decrease the required rate of return (ke).

Correct Answer:

Decrease the required rate of return (ke).

Question 2

5 out of 5 points

The primary objective of a for-profit firm is to ___________.

Answer

Selected Answer:

maximize shareholder value

Correct Answer:

maximize shareholder value

Question 3

5 out of 5 points

The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?

...view middle of the document...

Correct Answer:

raise the price.

Question 10

5 out of 5 points

Which of the following would tend to make demand INELASTIC?

Answer

Selected Answer:

the proportion of the budget spent on the item is very small

Correct Answer:

the proportion of the budget spent on the item is very small

Question 11

5 out of 5 points

Suppose we estimate that the demand elasticity for fine leather jackets is ‑.7 at their current prices. Then we know that:

Answer

Selected Answer:

a 1% increase in price reduces quantity sold by .7%.

Correct Answer:

a 1% increase in price reduces quantity sold by .7%.

Question 12

5 out of 5 points

An income elasticity (Ey) of 2.0 indicates that for a ____ increase in income, ____ will increase by ____.

Answer

Selected Answer:

one percent; quantity demanded; two percent

Correct Answer:

one percent; quantity demanded; two percent

Question 13

5 out of 5 points

In regression analysis, the existence of a high degree of intercorrelation among some or all of the explanatory variables in the regression equation constitutes:

Answer

Selected Answer:

multicollinearity

Correct Answer:

multicollinearity

Question 14

0 out of 5 points

When using a multiplicative power function (Y = a X1b1 X2b2 X3b3) to represent an economic relationship, estimates of the parameters (a, and the b's) using linear regression analysis can be obtained by first applying a ____ transformation to convert the function to a linear relationship.

Answer

Selected Answer:

polynomial

Correct Answer:

double-logarithmic

Question 15

0 out of 5 points

In testing whether each individual independent variables (Xs) in a multiple regression equation is statistically significant in explaining the dependent variable (Y), one uses the:

Answer

Selected Answer:

Durbin-Watson test

Correct Answer:

t-test

Question 16

5 out of 5 points

In which of the following econometric problems do we find Durbin-Watson statistic being far away from 2.0?

Answer

Selected Answer:

autocorrelation

Correct Answer:

autocorrelation

Question 17

5 out of 5 points

Which of the following barometric indicators would be the most helpful for forecasting future sales for an industry?

Answer

Selected Answer:

leading economic indicators.

Correct Answer:

leading economic indicators.

Question 18

5 out of 5 points

The use of quarterly data to develop the forecasting model Yt = a +bYt−1 is an example of which forecasting technique?

Answer

Selected Answer:

Time-series forecasting

Correct Answer:

Time-series forecasting

Question 19

0 out of 5 points

If two alternative economic models are offered, other things equal, we would

Answer

Selected Answer:

tend to pick the one with the lowest R2.

Correct Answer:

select the model that gave the most accurate forecasts

Question 20

5 out of 5 points

Smoothing techniques are a form of ____ techniques which assume...

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