Assuming That You Have a VAR Model with 2 Variables

question 8

Multiple Choice

Assuming that you have a VAR model with 2 variables (A and B) including many lags, how can you test whether A cause Granger-causes changes in B?

• A) By observing if the differences in correlation between A and B are statistically significant
• B) Impose restrictions that all the coefficients of the lags of A are equal to 0 in the equation for B of the VAR model and test the joint hypothesis within the F-test framework
• C) Impose restrictions that all the coefficients of the lags of B are equal to 0 in the equation for A of the VAR model and test the joint hypothesis within the F-test framework
• D) None of the above

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Definitions:

Cognitions

Mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Attributions

Attributions refer to the explanations individuals make about the causes of their own and others' behavior.

Behavioral Component

The aspect of attitudes that pertains to the way one behaves with respect to certain stimuli or situations.

Affective

Pertaining to moods, emotions, and feelings, reflecting the emotional aspect of human experience.