By the conditional probability formula, we have 1. P(A | B) = P(AB) / P(B) and 2.

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By the conditional probability formula, we have
1. P(A | B) = P(AB) / P(B) and
2. P(B | A) = P(AB) / P(A) → P(AB) = P(B | A) P(A)
where → means "implies." If you substitute for P(AB) from the right-hand side of (2) into the numerator of (1), what do you get? How do you interpret this result?
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Essentials of Econometrics

ISBN: 978-0073375847

4th edition

Authors: Damodar Gujarati, Dawn Porter

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