The following is not a consequence of Xt and Yt being cointegrated:
A) if Xt and Yt are both I(1), then for some ?, Yt – ? Xt is I(0).
B) Xt and Yt have the same stochastic trend.
C) in the expression Yt – ? Xt , ? is called the cointegrating coefficient.
D) if Xt and Yt are cointegrated then integrating one of the variables gives you the same result as integrating the other.
Answer: D
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The magnitude of the slope of the budget line is the ratio of
A) a price to its quantity. B) a quantity to its price. C) two prices. D) two marginal rates of substitution.
Which of the following statements is CORRECT?
A) When demand increases, both the price and the quantity increase. B) When demand decreases, the price rises and the quantity decreases. C) When supply increases, the quantity decreases and the price rises. D) When supply decreases, both the price and the quantity decrease.