The long-run cumulative dynamic multiplier
A)cannot be calculated since in the long-run,we are all dead.
B)is the sum of all individual dynamic multipliers.
C)is the coefficient on Xt-r in the standard formulation of the distributed lag model.
D)is the difference between the coefficient on Xt-1 and Xt-r.

Question

Quizplus · Accepted Answer

The long-run cumulative dynamic multiplier is the sum of all individual dynamic multipliers, as it represents the cumulative effect of a change in the independent variable over a long period of time. Option A is a quote by John Maynard Keynes but not relevant to the question. Option C refers to the lagged independent variable in a distributed lag model and option D refers to the first-order difference in a time series.

The Long-Run Cumulative Dynamic Multiplier