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Consider the Following Equation for Household Consumption Expenditure: Consmptn= β0

Question 20

Multiple Choice

Consider the following equation for household consumption expenditure: Consmptn= β0+ β1Inc + β2Consmptn-1+ u
Where 'Consmptn' measures the monthly consumption expenditure of a household,'Inc' measures household income and 'Consmptn-1' is the consumption expenditure in the previous month.Consmptn-1 is a _____ variable.


A) exogenous
B) binary variable
C) lagged dependent
D) proxy variable

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