Which of the Following Are Probably Valid Criticisms of the Dickey

question 12

Multiple Choice

Which of the following are probably valid criticisms of the Dickey Fuller methodology?
(I) The tests have a unit root under the null hypothesis and this may not be rejected due to insufficient information in the sample
(ii) the tests are poor at detecting a stationary process with a unit root close to the non-stationary boundary
(iii) the tests are highly complex to calculate in practice
(iv) the tests have low power in small samples

• A) (i), (ii), (iii) and (iv)
• B) (i), (ii), and (iv) only
• C) (i) and (iii) only
• D) (ii) only

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Definitions:

MAPL System

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Time Bias

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Space Bias

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