Suppose You Wish to Estimate the Marginal Effect That Income

question 35

Multiple Choice

Suppose you wish to estimate the marginal effect that income has on consumption.The distributed lag model would be specified as

• A) \(\text { Consumption } _ { i } = \beta _ { 0 } + \beta _ { 1 } \text { Income } _ { i } + \beta _ { 2 } \text { Income } _ { i - 1 } + \varepsilon _ { t } \text {. }\)
• B) \(\text { Consumption } _ { t } = \beta _ { 0 } + \beta _ { 1 } \text { Income } _ { t } + \varepsilon _ { t }\)
• C) \(\text { Consumption } _ { i } = \beta _ { 0 } + \beta _ { 1 } \text { Income } _ { i } + \varepsilon _ { i } \text {. }\)
• D) \(\text { Consumption } _ { t } = \beta _ { 0 } + \beta _ { 1 } \text { Income } _ { t } + \beta _ { 2 } \text { Income } _ { t - 1 } + \varepsilon _ { t } \text {. }\)

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