What are the advantages and disadvantages of VAR models?
What will be an ideal response?
The advantages of VAR models are that all the variables in the model are endogenous, the impact of a shock to one variable can be examined to see how it affects all the other variables, and you can see how important one variable is for explaining the movements in other variables. Disadvantages are that they are difficult to use for interpreting historical events and for analyzing the effects of shocks, especially shocks to monetary or fiscal policy.
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_____ suggests that the interest rate on a domestic bond equals the interest rate on a foreign bond minus the expected appreciation of the domestic currency.
A. One-price-fits-all condition B. Absolute purchasing-power parity C. Relative purchasing-power parity D. Interest-rate parity.
A recent Consumer Reports study analyzed flat-screen TVs and found that the average performance rating for all TVs tested was 80 with an average price of $340
Clarence flat-screen TV has a perceived customer value of 30, and relative performance of 112. What is the relative cost of purchase for a Clarence flat-screen TV? A) 11.34 B) 340 C) 33.6 D) 82 E) 120
When presenting decreases in long-term investments in the investing activities section of the statement of cash flows, the amount reflected equals the amount of the gain(s) or loss(es) from the transaction(s)
Indicate whether the statement is true or false
Which of Hofstede’s dimensions expresses the extent to which people in different societies accept the way power is distributed?
A. individualist–collectivist B. long- or short-term orientation C. uncertainty avoidance D. power distance