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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?
baumol''s sales maximasation model
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What is buget line how it is calculated?
the price of a laptop increases by 20% and there is a 40% drop in the quantity demanded
Qdx=-30p+0.10+4pr+4t
Why elasticity is important for economic analysis? Elasticity is a significant concept in understanding the incidence of indirect taxation, marginal concepts as they relate to
LANTHENOIDS
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