Q4

Question 1

What is the SR equation

Answer 1

Change LnX1 = A1 + A2lnX2 + A3Ut-1 + Vt

Question 2

What is Vt in SR equation?

Answer 2

White noise term

Question 3

What is Change in SR equation?

Answer 3

First difference operator

Question 4

What is Ut-1 in SR equation?

Answer 4

Lagged value of error correction term

Question 5

What does A2 mean in SR equation?

Answer 5

Gives immediate relationship of change in X1 on change in X2!