Consider the Following Equation: Log(y_t )= 0

question 3

Multiple Choice

Consider the following equation: Log(y_t ) = 0.7 + 1.2log(s_t ) + 0.3log(s_t-1) + 0.2log(s_t-2) + 0.1log(s_t-3)
What is the percentage increase in y given a permanent 1% increase in s?

• A)1.2
• B)1.8
• C)2.5
• D)0.5

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Definitions:

Lower Entropy

A state or condition of decreased disorder or randomness in a system, often associated with increased order or organization.

Oxidation

A chemical reaction involving the loss of electrons or an increase in oxidation state by a molecule, atom, or ion.

Substance

A form of matter that has a specific chemical composition and distinct physical properties.

Electrons

Subatomic particles with a negative charge, found orbiting the nucleus of an atom, involved in chemical bonds and electrical conductivity.