This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Assume that the research team of a major company is building a model of consumer demand that ... (Read 117 times)

go.lag

  • Hero Member
  • *****
  • Posts: 667
on: Jun 29, 2018
Assume that the research team of a major company is building a model of consumer demand that contains approximately 250 variables. Can you think of a principle that might be violated here that was discussed in chapter 1? Explain.
 
  What will be an ideal response?

Question 2

If workers accurately predict the rate of inflation, is there a short-run trade-off between inflation and unemployment, as predicted by the Phillips curve? Why or why not?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

akpaschal

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 29, 2018
Answer to Question 1

The principle that is probably being violated is Ockham's Razor. This is the idea that irrelevant data should be cut away. With 250 variables it is very likely that many of them are unnecessary and will only make the model more complicated.

Answer to Question 2

If workers accurately predict the rate of inflation, then they will incorporate wage adjustments into their contracts that will take inflation into account. The result is no change in the real wage, and no change in the unemployment rate, indicating that there is no trade-off between inflation and unemployment. Instead, the Phillips curve would be vertical.


go.lag

  • Member
  • Posts: 667
Reply 2 on: Jun 29, 2018
Gracias!

Mochi

  • Member
  • Posts: 300
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

Organ systems of the body with major functions. Organ systems of the body with major functions.
Louis H. Sullivan, Bayard-Condict Building, New York. Louis H. Sullivan, Bayard-Condict Building, New York.
Scientists do research in the laboratory and in the field Scientists do research in the laboratory and in the field
Research that has examined babies' ability to recognize themselves develops in the 2 year Research that has examined babies' ability to recognize themselves develops in the 2 year
The Major Plant Groups The Major Plant Groups
Lac repressor protein binding. The crystal structural model of Lac repressor binding at lacO Lac repressor protein binding. The crystal structural model of Lac repressor binding at lacO
Video: Energy inputs and release in glycolysis Animation

For a complete list of videos, visit our video library