The Distributed Lag Model Assumptions Include All of the Following

question 39

Multiple Choice

The distributed lag model assumptions include all of the following with the exception of:

• A)There is no perfect multicollinearity.
• B)X_t is strictly exogenous.
• C)E(u_t | X_t, X_t-1, X_t-2)= 0
• D)The random variables X_t and Y_t have a stationary distribution.

---

Definitions:

Administration Expenses

Expenses related to the general operation of a business that are not directly tied to the production or sale of goods or services, such as office supplies and salaries of administrative personnel.

Square Footage

A measurement of area used to determine the size of a space, often utilized in real estate to measure the size of buildings or rooms.

Setup Costs

Expenses incurred to prepare equipment or processes for manufacturing or service provision, often categorized as part of overhead.

Direct Labor Hours

The total number of hours worked by employees directly involved in the production of goods or services.