A predetermined variable in a simultaneous equations model is:
A)a constant.
B)the error term.
C)a lagged variable.
D)an omitted variable.

Question

Quizplus · Accepted Answer

A predetermined variable in a simultaneous equations model can be a lagged variable because it is determined by past values and not affected by current disturbances within the model. Constants, error terms, and omitted variables do not fit the definition of predetermined variables in this context.

A Predetermined Variable in a Simultaneous Equations Model Is