Following equation states that the SRAS curve is an upward sloping curve. Y=Y+ a(P- EP). Briefly explain the imperfect information model that provide the above SRAS equation. (You are supposed to give a clear and full explanation)
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- Review the logic of spuriousness. Can you think up an example where an observed relationship between two variables could actually be explained away by a third variable?Nutritional economics. Suppose we are considering a hungry individual in the Gross-man model deciding what to have for dinner. His options are listed in Table 3.2. Each dish has an effect on the level of the home good Z and health H.a. Suppose the diner’s single-period utility function is as follows: U = 3Z + HIf the diner is trying to maximize his single-period utility, and he can only select one item from Table 3.2, which meal would he choose?b. A miracle pill is discovered that halves the negative health impact of cookies. How does this impact the diner’s choice?c. What effect does the miracle pill have on the diner’s health H? Interpret this result.Does this mean the diner would be better off without the miracle pill?d. If the diner is instead trying to maximize his lifetime utility and not just his single-period utility, how might your answer to Exercise 16(a) change? Is he likely to value Z or H more in the lifetime context than the single-period context? Explain your answer, and…Which of the following is an accurate definition of the problem of reverse causality? A situation when variation of the independent variable does not depend on that of the confound variable. A situation when variation of the independent variable depends on that of the depended variable. A situation in which a researcher believes that one variable influences a second variable, when in fact it is the second variable that influences the first. A situation when variation of the independent variable does not depend on that of the depended variable.
- 1. Can you define Probit Model using the Latent Utility Approach, if all the identification restrictions for the model? Justify why we need to impose the identification restrictions.The following model can be used to study whether campaign expenditures affect election outcomes: vote A = Bo + Bilog(expendA) + B₂log (expendB) + 33prtystrA + u where vote is the percentage of the vote received by Candidate A, expendA and expendB are campaign expenditures by Candidates A and B, and prtystrA is a mea- sure of party strength for Candidate A (the percentage of the most recent presidential vote that went to A's party). 1. What is the interpretation of ₁? 2. In terms of the parameters, state the null hypothesis that a 1% increase in A's expenditures is offset by a 1% increase in B's expenditures. 3. Estimate the given model using the data in VOTE1.dta (from Wooldridge) and report the results in usual form. Do A's expenditures affect the outcome? What about B's expenditures? Can you use these results to test the hypothesis in part 2?This is the only information provided for question. Please answer a) briefly if possible I will upvote Thanks! Topic - Covid-19 & its impact on housing market Independent variable (x) : Covid -19 Dependent variable (y) : its impact on housing market Y tends to decrease when the X rises. The Covid 19 here is the independent variable. When the spread of the virus increased , the income fell which led to the fall in the housing market also. Hence when the X rises , Y tends to fall and when X will fall , Y will rise. Hence the relation formed here will have a negative slope and there is negative correlation between these two variables. Have you established the correlation coefficient determination of the topic? a)Does the preciseness of the shift in y as x increases determine the strength of the linear correlation?
- I have the following model for local area crime rates: crime = β0 + β1unem + β2police_exp + u I am trying to estimate the causal effect of government expenditure on the local police force (police_exp) on crime rates (crime). But, it can be hard to estimate the causal effect of police expenditure on crime, even after controlling for the local area unemployment rate (unem). The reason is that crime rates and expenditure on the police are simultaneously determined, or in other words that there are many omitted factors that drive the crime rate in a local area and that are also related to expenditure on police. So expenditure on police is endogenous in this model. I am planning to use the local area crime rate from three years ago (crime−3) as a proxy for these omitted local area characteristics. Which of the following assumptions must my proxy variable crime−3 satisfy to ensure that I can consistently estimate the effect of police expenditure on crime? a) E (crime−3 |…A study of traffic violations on a busy highway finds that the number of tickets for speeding written by officers tends to decrease on rainy days. A police sergeant explains that driver behavior could be a confounding variable. Which statement best explains the confounding variable in this study? On sunny days, more tickets for speeding are written than on rainy days. Officers are less likely to want to leave their police cars to write tickets on rainy days. Drivers may drive more carefully on rainy days, so the number of speeding tickets decreases. O Drivers are more likely to speed on rainy days to get to their destination faster.Hello What is the Euler equation used for in this model in equation 7. This is a model from asset pricing. c_t = Consumption U = Utility
- 7.14. Demand for car motor fuel. An economist wants to model annual per capita demand, y, for passenger car motor fuel in the United States as a function of the two quantitative independent variables, average real weekly earnings (x1) and average price of regular gasoline (x2). Data on these three variables for the years 1985-2017 390available in the ProQuest 2018 Statistical Abstract of the United States. Suppose the economist fits the model E(y) = Bo + B1X1 + B2x2 to the data. Would you recommend that the economist use the least squares prediction equation to predict per capita consumption of motor fuel in 2020? Explain.In an OLG model, which of the following statement about equilibrium is wrong: A. equilibrium occurs when money sold = money bought B. 1 money = v bananas If v is too large, then money is expensive, gen 1 wants to buy very few units of money. We do NOT reach an equilibrium. C. 1 money = v bananas If v is too small, then money is expensive, gen 1 wants to buy very few units of money. We do NOT reach an equilibrium.Nutritional economics. Suppose we are considering a hungry individual in the Grossman model deciding what to have for dinner. His options are listed in Table 3.2. Each dish has an effect on the level of the home good Z and health H. a. Suppose the diner’s single-period utility function is as follows:U =3Z +HIf the diner is trying to maximize his single-period utility, and he can only select one item from Table 3.2, which meal would he choose? b. If the diner is instead trying to maximize his lifetime utility and not just his single period utility, how might your answer to Exercise 16(a) change? Is he likely to value Z or H more in the lifetime context than the single-period context? Explain your answer, and be sure to invoke the concept of a capital good