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Eq.1 is an equilibrium condition and is always true by definition. (Eq.2) 𝐶𝑡 = 𝑎1 + 𝑎2𝑌𝑡 + 𝜀1𝑡 ▸ states that aggregate ______ depends on national income.
Eq.1 is an equilibrium condition and is always true by definition. (Eq.2) 𝐶𝑡 = 𝑎1 + 𝑎2𝑌𝑡 + 𝜀1𝑡 ▸ states that aggregate ______ depends on national income.
consumption
(Eq.3) 𝐼𝑡 = 𝛽1 + 𝛽2(𝑌𝑡 − 𝑌𝑡−1) + 𝜀2𝑡 ▸states that ______ depends on the change in national income.
(Eq.3) 𝐼𝑡 = 𝛽1 + 𝛽2(𝑌𝑡 − 𝑌𝑡−1) + 𝜀2𝑡 ▸states that ______ depends on the change in national income.
investment
Where: ______ = consumption, Y = national income, I = investment, G = government expenditure t = time.
Where: ______ = consumption, Y = national income, I = investment, G = government expenditure t = time.
C
The last two equations contain the ______ disturbance or error terms 𝜀1𝑡 and 𝜀2𝑡 which are random variables that account for the inherent randomness of human behavior, the influence of variables not included in the e.
The last two equations contain the ______ disturbance or error terms 𝜀1𝑡 and 𝜀2𝑡 which are random variables that account for the inherent randomness of human behavior, the influence of variables not included in the e.
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Econometric Models- Algebraic models that include ______ variables are often called econometric models
Econometric Models- Algebraic models that include ______ variables are often called econometric models
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