Given the augmented Phillips model: y = β₀ + β₁x₁ + β₂x₂+ε, where y = actual rate of inflation (%), x₁ = unemployment rate (%), and x₂ = anticipated inflation rate (%). The response variable or variables in this model is (are) the ________. A) unemployment rate B) actual inflation rate C) anticipated inflation rate D) unemployment rate and anticipated inflation rate

Question

Quizplus · Accepted Answer

The response variable in this model is the actual rate of inflation, which is represented by the variable y. Neither the unemployment rate nor the anticipated inflation rate are the response variable in this model.

Given the Augmented Phillips Model: Y = β0 + β1x1

Given the Augmented Phillips Model: Y = β₀ + β₁x₁