What is the inconsistency in ß1

Assignment Help Microeconomics
Reference no: EM133440697

Assignment:

Suppose that the model

pctstck= β0+β1funds+β2risktol+ω

Satisfies the first four Gauss-Markov assumptions, where pctstck is the percentage of worker's pension invested in the stock market, funds is the number of mutual funds that the worker can choose from, and risktol is some measure of risk tolerance (larger risktol means the person has a higher tolerance for risk). If funds and risktol are positively correlated, what is the inconsistency in β1, the slope coefficient in the simple regression of pctstck on funds?

Reference no: EM133440697

Questions Cloud

What are the effects of economic inequality : What are the effects of economic inequality (provide 8 or more effects, including effects of uneven resource distribution)? Explain each with 4 to 5 sentences.
Describe the concept of supplier-induced demand : Besides medicine, name another field where the provider of the service can convince people that they need products or services that they really don't need.
What is the opportunity cost of producing 1 tonne of iron : Suppose that Indonesia suggests that Australia sells iron to Indonesia for 2.0 tonnes of petrol for every tonne of iron.
Describe the bolshevik revolution : For China, what was the "Great Leap Forward" under Mao? Also, name one or more of the Four Horsemen of the Apocalypse regarding this policy.
What is the inconsistency in ß1 : If funds and risktol are positively correlated, what is the inconsistency in ß1, the slope coefficient in the simple regression of pctstck on funds?
What might be the long-run effect of the rising price of gas : What might be the long-run effect of the rising price of gas? Who benefits and who is harmed by the price increase?
Evaluating a intervention on an extra financial resource : My paper is about evaluating a program/intervention on an extra financial resource to improve health outcomes/Education in Indonesia or a program/intervention.
What is the irr : If Dr. Smith buys a machine for $5000 and is able to improve the earnings of her practice by $2000 a year for five years.
Analyze the electronic prescribing systems in hospitals : The case study of the journal "Electronic prescribing systems in hospitals to improve medication safety: a multimethod research programme".

Reviews

Write a Review

Microeconomics Questions & Answers

  What is the total state and federal income tax

A major industrialized state has a state corporate tax rate of 9.6% of taxable income. If a corporation has a state taxable income of $150,000.

  The advantages of doing business as a limited liability

What are the advantages of doing business as a limited liability company? That is, if you want to open a small business, you have several options---sole proprietorship, partnership, LLC, etc. Why might you select a LLC over the other options..

  Eliminate the interaction of inflation with the tax system

How can the Fed affect the amount of reserves that banks hold? What interest rates can it change to manipulate the quantity of reserves - How do stock prices behave if stock markets are efficient and if investors do not care about risk?

  Derive the hhi

Derive the HHI

  The elasticity of demand coefficient for a good is 4

If the elasticity of demand coefficient for a good is 4(in absolute term), we know: a: that for every 1%increase in quantity, there will be a 4% increase in price b: that for every 1% increase in quantity, there will be a 4% decrease in price c: that..

  Money market is initially in equilibrium

Employing Figure 4-2 above, the money market is initially in equilibrium at point G and after the economy moves to equilibrium, the Federal Reserve increases the money supply by 500. We would observe:

  In 1980 california instituted a new system for funding

in 1980 california instituted a new system for funding special education. among other things the system

  The government reduces tax rates

Using diagrams for aggregate expenditures (AE) and aggregate demand and supply (AD-AS), show the short- run effects the following event has on the Canadian economy. Be sure to identify the cause of any shift or movement along AE, AD, and/or AS and in..

  Discuss the methods of controlling thermal conditions

Discuss the methods of controlling thermal conditions. Include engineering controls, administrative controls, and work practices.

  What the short-run average cost

In the short run, capital is a fixed cost. Draw, for a few different values of K, what the short-run average cost, SRAC, looks like in relation to the long-run average cost.

  What are profits as a function of p y w and k

What is the firm's choice of L given P, Y, W, and K? Given this choice of L, what are profits as a function of P, Y, W, and K?

  According to the quantity theory of prices and money

According to the quantity theory of prices and money, a five percent change in the money supply, holding other variable constant, leads to

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd