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

Consider the AR(1) model Yt = β 0 + β 1 Y t-1 + ut. Suppose that the process is stationary.

a. Show that E(Y t ) = E(Y t - 1 )

b. Show that E(Y t ) = β 0 /(1- β 1 )

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