Which of the Following Is a Criticism Leveled Against VAR

question 24

Multiple Choice

Which of the following is a criticism leveled against VAR models?

• A)VAR models are based on classical rather than Keynesian economic theory.
• B)Var models are not based on data.
• C)VAR models are unable to isolate the effects of policy variables because those variables are not exogenous.
• D)VAR models isolate the effects of policy variables because those variables are exogenous variables.

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