Question: With a log-log model, log(Y) = 0 + 1 log(X 1 ) + 2 log(X 2 ) + u A. 1 > 1 indicates a

With a "log-log" model, log(Y) = 0 + 1 log(X1) + 2 log(X2) + u

A.

1 > 1 indicates a negative effect of X1, and 0 < 1 < 1 indicates a positive effect.

B.

1 > 1 indicates a decreasing effect as X1 becomes larger, and 0 < 1 < 1 indicates an increasing effect as X1 becomes larger.

C.

1 > 1 indicates a positive effect of X1, and 0 < 1 < 1 indicates a negative effect.

D.

1 > 1 indicates an increasing effect as X1 becomes larger, and 0 < 1 < 1 indicates a decreasing effect as X1 becomes larger.

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