Author Question: Refer to the scenario above. Which of the followings statements is true of the model? A) ... (Read 47 times)

Charlie · **on:** Jun 30, 2018

Refer to the scenario above. Which of the followings statements is true of the model?

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

Question 2

If the real interest rate is greater than the nominal interest rate in an economy:

A) inflation must be negative in the economy. B) inflation must be positive in the economy.
C) inflation must be zero in the economy. D) the nominal interest rate must be equal to zero.