Which of These Is an Approach Used to Determine the Appropriate

question 7

Multiple Choice

Which of these is an approach used to determine the appropriate lag lengths of VAR models?

• A) Graphically plotting the time series of the data
• B) Selecting the number of lags that maximises the information criteria
• C) Selecting the number of lags that minimises the information criteria
• D) None of the above

---

Definitions:

Average Total Cost

The total cost of production divided by the quantity produced, indicative of the cost per unit of output.

Total Cost

The combined total of all costs associated with generating goods or services, covering both fixed and variable expenses.

Price of Labor

The wage rate paid to employees, essentially the cost of labor to employers.

AVC Curve

A graph that shows the average variable costs of production at different levels of output.