Multiple Choice
Suppose that we have the following results from a model with lagged dependent variable
Yit = 0.9Yi,t-1 + 2X1it
Which of the following is most accurate?
A) The short-term effect of a one unit change in X will be a 2.9 unit change in Y.
B) The long-term effect of a one unit change in X will be a 20 unit change in Y.
C) The long-term effect of a one unit change in X will be a 4 unit change in Y.
D) Y will keep getting smaller and smaller over time.
Correct Answer:
Verified
Correct Answer:
Verified
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