Assume That for the T = 2 Time Periods Case

question 8

Multiple Choice

Assume that for the T = 2 time periods case, you have estimated a simple regression in changes model and found a statistically significant positive intercept. This implies

• A)a negative mean change in the LHS variable in the absence of a change in the RHS variable since you subtract the earlier period from the later period
• B)that the panel estimation approach is flawed since differencing the data eliminates the constant (intercept)in a regression
• C)a positive mean change in the LHS variable in the absence of a change in the RHS variable
• D)that the RHS variable changed between the two subperiods

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Definitions:

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Utility Function

A mathematical expression that describes how the total satisfaction or happiness of a consumer changes with changes in consumption of goods and services.

Demand Function

A mathematical equation that describes the relationship between the quantity demanded of a good and its various determinants like price, income, and prices of related goods.

Price of X

The amount of money or compensation required to purchase one unit of product X.