Question: Consider the AR(1) model Yt = 0 +1Yt-1 + ut. Suppose that the process is stationary. a. Show that E(Yt) = E(Yt-1). b. Show that

Consider the AR(1) model Yt = β0 +β1Yt-1 + ut. Suppose that the process is stationary.
a. Show that E(Yt) = E(Yt-1).
b. Show that E(Yt) = β0/(1 - β1).

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