The ADL(p,q)model is represented by the following equation
A)Yt = β0 + βpYt-p + δqXt-q + ut.
B)Yt = β0 + β1Yt-1 + β2Yt-2 + ...+ βpYt-p + δqut-q.
C)Yt = β0 + β1Yt-1 + β2Yt-2 + ...+ βpYt-p + δ0 + δ1Xt-1 + ut-q.
D)Yt = β0 + β1Yt-1 + β2Yt-2 + ...+ βpYt-p + δ1Xt-1 + δ2Xt-2 + ...+ δqXt-q + ut.

Question

Quizplus · Accepted Answer

The ADL(p,q) model includes lagged values of the dependent variable (Y) and lagged values of the independent variable(s) (X) as predictors, along with an error term (u). Option D is the only equation that includes both lagged values of Y and X as predictors, making it the best representation of the ADL(p,q) model.

The ADL(p,q)model Is Represented by the Following Equation