Refer to the following model. y_t = α₀ + β₀s_t+ β₁s_t-1 + β₂s_t-2+ β₃s_t-3 + u_t Β₀+ β₁+ β₂+ β₃represents: A)the short-run change in y given a temporary increase in s. B)the short-run change in y given a permanent increase in s. C)the long-run change in y given a permanent increase in s. D)the long-run change in y given a temporary increase in s.

Question

Quizplus · Accepted Answer

The sum of the coefficients (β₀ + β₁ + β₂ + β₃) represents the long-run change in y given a permanent increase in s, as it captures the total effect of a sustained change in s over time.

Refer to the Following Model