If a "Break" Occurs in the Population Regression Function, Then

question 23

Multiple Choice

If a "break" occurs in the population regression function, then

• A)inference and forecasting are compromised when neglecting it.
• B)an Augmented Dickey Fuller test, rather than the Dickey Fuller test, should be used to test for stationarity.
• C)this suggests the presence of a deterministic trend in addition to a stochastic trend.
• D)forecasting, but not inference, is unaffected, if the break occurs during the first half of the sample period.

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