THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 76

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
Consider the following model: Y = β₀ + β₁X_1t + β₂X_2t + γY_t-1.Suppose we increase X₁ by one unit in time period t,with all other independent variables in the model held fixed.
-What is the expected increase in the dependent variable in time period (t + 1) ?

• A)β₁γ
• B)β₁γ³
• C)β₁γ²
• D)β₁ + β₀

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