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1. What is simultaneous biases? Discuss the cause of ednoginity in regression analysis.
2. Explains concisely what is meant by ' the identification problem'' in the context of liner simultaneous equation model.
3.
4. i) Consider the identifiability of each of the equations in the following model
(use rank and order conditions):
where:
C(consumption), I(investment), T (taxation), Y(income) are endogenous variables; G(government expenditure) is exogenous; U, V and W are random disturbance terms.
ii) What problems arise in the interpretation of the coefficient estimates of equations that are not identified?
(iii) Why do simultaneous equations violate the classical assumption of independence between the error term and the explanatory variables?
(iv) What happens if OLS is used to estimate the coefficients of a simultaneous system?
(vii) What is Two-Stage Least Squares? What are the properties of Two-Stage Least Squares?
Problems relating to national income estimation: Changing prices of goods and services . Prices of goods and services do change from one period to another. This makes compari
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1. Calculate price elasticity of demand and supply for the following functions when (a) P=8 and (b) Q=6. i. P= 40 - 0.5Q ii. Q= -40 + 0.75P iii
what are the values of real money supply and the current price level
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a) Explain the perverse incentive. b) What makes the incentive perverse? c) How could the incentive makers better the incentive?
Consider the market for Kitty Litter. Assume this industry is purrfectly competitive and is presently in long-run equilibrium. Suppose people begin to prefer Dogs as pets and Cat
what are the various types of cost curves?
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THEORY OF CUSTOMS UNION: A customs union is an association of two or more countries to encourage trade. The countries making such an arrangement agree to eliminate tariffs and
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