In the distributed lag model, the coefficient on the contemporaneous value of the regressor is called the
A)dynamic effect.
B)cumulative multiplier.
C)autoregressive error.
D)impact effect.

Question

Quizplus · Accepted Answer

The coefficient on the contemporaneous value of the regressor is called the impact effect, as it represents the immediate effect of a change in the regressor on the dependent variable. The other options are not correct: the dynamic effect refers to the impact of past values of the regressor on the dependent variable through lagged terms in the model; the cumulative multiplier refers to the combined impact of multiple lags of the regressor on the dependent variable; and the autoregressive error refers to the correlation between the error terms of the model at different lags.

In the Distributed Lag Model, the Coefficient on the Contemporaneous