Suppose the following model describes changes in the civilian unemployment rate: Δuert = −0.0405 − 0.4674Δuert −1. The current change (first difference) in the un- employment rate is 0.0300. assume that the mean-reverting level for changes in the unemployment rate is −0.0276. a. what is the best prediction of the next change? b. what is the prediction of the change following the next change? C. explain your answer to Part b in terms of equilibrium.

Suppose the following model describes changes in the civilian unemployment rate: Δuert = −0.0405 − 0.4674Δuert −1. The current change (first difference) in the un- employment rate is 0.0300. assume that the mean-reverting level for changes in the unemployment rate is −0.0276. a. what is the best prediction of the next change? b. what is the prediction of the change following the next change? C. explain your answer to Part b in terms of equilibrium.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter4: Equations Of Linear Functions

Section4.5: Correlation And Causation

Problem 2AGP

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