Question: consider the following regression ln(GDP) = 0.80 + 0.70 ln (M2V) + 0.10 ln (debt) where GDP = Gross National Product M2V = velocity of
consider the following regression
ln(GDP) = 0.80 + 0.70 ln (M2V) + 0.10 ln (debt)
where GDP = Gross National Product
M2V = velocity of money
debt = National debt
choose the correct interpretation of the coefficient of debt
| if debt increase by 1 unit, GDP will increase by 0.10 units, assuming all other variables remain constant. | ||
| if debt increases by 1 unit, GDP will increase by 0.10 %, assuming all other variables remain constant. | ||
| if debt increases by 1%, GDP will increase by 0.10 %, assuming all other variables remain constant. | ||
| if debt increases by 1%, GDP will increase by 10%, assuming all other variables remain constant. |
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
