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THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

Question 48

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
Consider the following model: Y = β0 + β1X1t + β2X2t + γ3Yt-1.Using a sample of 36 months,we estimate this model and obtain the following results: yt = 1.33 + 17.6x1t + 0.94x2t + 0.39Yt-1
-What value would we typically expect for γ3?


A) 0 < γ < 1
B) -1 < γ < 1
C) γ > 1
D) γ > 0

Correct Answer:

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