The Order Condition for Identification of an Equation Requires That

question 12

Multiple Choice

The order condition for identification of an equation requires that there should be _____.

• A)at least one exogenous explanatory variable in a structural equation
• B)at least as many excluded exogenous explanatory variables as there are included endogenous explanatory variables
• C)at least as many dummy variables in an equation as there are exogenous explanatory variables
• D)as many lagged independent variables in an equation as there are exogenous explanatory variables

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Definitions:

Voluntary Quota

A self-imposed limit on the quantity of goods a country exports or imports.

Elasticity of Supply

A measure of how much the quantity supplied of a good changes in response to a change in the price of that good.

Price Elasticity

The degree to which the demand for a good is responsive to changes in its price.

Tax Passed

Occurs when the burden of a tax is shifted from the entity legally responsible for it to another party, such as consumers.