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Question:
(a) Formulate a VAR with 4 lags and also rewrite it in matrix form, mentioning the limitations of such models.
(b) What is the rationale behind introducing lag-dependent variable in a regression?
(c) What do you understand by non-linear models?
(d) Formulate an ARCH(q) model show how you would test for ARCH effects.
(e) How would you proceed with estimating a GARCH model?
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what is indirect utility function?
Factor that affect the volume of production
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