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(a) What is meant by heteroscedasticity and what are the consequences of applying OLS estimation in its presence?
(b) Explain in details the Generalised least Square procedure that can be used to correct the problem of heteroscedasticity and propose other alternative solutions?
(c) Explain and show graphically what autocorrelation means, what are the consequences of ignoring it and how can the application of the Durbin-Watson test helps in detecting it?
Functions
b) Sally’s firm produces granola bars with a fixed cost of 10 (this cost is already sunk). Her variable cost function is VC = q2 + 2q. Assuming the market for granola bars is comp
factor afecting the demand for durable product
1. How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service? a 2. The above figure show
Elasticity of Demand Price elasticity of demand measures percentage change in quantity demanded which results from a 1 % change in price. Price Elasticity
4) The prevention of major swings in economic activity can be handled most easily by the A. household sector B. business sector C. financial sector D. government sector Explain
Suggestions For the last 60 years the Bretton Woods institutions have played an essential role in ensuring global financial stability and fostering economic growth and develop
10
Arbitrage Pricing Theor y Arbitrage defines the procedure of continuously buying a security for privacy, currency, or commodity on one market and selling it in another
Define the production terminology in short. Production Technology: Production is the procedure of transforming inputs to outputs. Characteristically, inputs consist of labor
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