The Order Condition for Identification of an Equation Requires That

question 12

Multiple Choice

The order condition for identification of an equation requires that there should be _____.

• A)at least one exogenous explanatory variable in a structural equation
• B)at least as many excluded exogenous explanatory variables as there are included endogenous explanatory variables
• C)at least as many dummy variables in an equation as there are exogenous explanatory variables
• D)as many lagged independent variables in an equation as there are exogenous explanatory variables

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Definitions:

Media Of Exchange

Objects or instruments used to facilitate the sale, purchase, or trade of goods between parties.

Demand Deposits

Bank accounts from which money can be withdrawn at any time without any notice, such as checking accounts.

Short-Term Bonds

Debt securities with maturities typically less than five years, often used by investors seeking lower risk and more liquidity.

Double Coincidence Of Wants

A situation in a barter system where two parties each hold an item the other wants, allowing them to exchange goods directly without the need for money.