The Vector of State Probabilities for Any Period Is Equal

question 46

True/False

The vector of state probabilities for any period is equal to the vector of state probabilities for the preceding period multiplied by the matrix of transition probabilities.

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Definitions:

Inferior Good

A good for which an increase in income reduces the quantity demanded

Good A

A placeholder term typically used in economic models to represent a generic item or service in the market.

Income Falls

A situation where an individual's or group's earnings decrease over a period of time.

Normal Good

A good for which an increase in income raises the quantity demanded.