Which of the Following Statements Is True

question 8

Multiple Choice

Which of the following statements is true?

• A)A model with a lagged dependent variable cannot satisfy the strict exogeneity assumption.
• B)Stationarity is critical for OLS to have its standard asymptotic properties.
• C)Efficient static models can be estimated for nonstationary time series.
• D)In an autoregressive model, the dependent variable in the current time period varies with the error term of previous time periods.

---

Definitions:

Demand Function

A mathematical expression that shows the relationship between the quantity of a good consumers are willing to buy and its price.

Price Elasticity

The measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Price Doubles

A situation where the price of a good, service, or commodity increases to twice its previous level, affecting supply and demand dynamics.

Intensive Margin

The degree to which factors of production, such as labor, are utilized more intensely to increase output in the short term.