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.

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