Which of the Following Identifies an Advantage of First Differencing

question 3

Multiple Choice

Which of the following identifies an advantage of first differencing a time-series?

• A)First differencing eliminates most of the serial correlation.
• B)First differencing eliminates most of the heteroskedastcicty.
• C)First differencing eliminates most of the multicollinearity.
• D)First differencing eliminates the possibility of spurious regression.

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Definitions:

Protectionist State Restrictions

Regulations implemented by a state to protect its domestic industries from foreign competition, often through tariffs, quotas, and other trade barriers.

Taxing Power

Taxing Power is the governmental authority to impose taxes on individuals, entities, and transactions to raise revenue for public purposes.

Federal Government

The national government of a federal state, where powers are divided between a central authority and constituent political units (like states or provinces).

Healthcare Reform

Efforts and policies aimed at improving, changing, or establishing healthcare systems to improve access, affordability, and quality of healthcare services.