A VAR with k time series variables consists of
A)k equations, one for each of the variables, where the regressors in all equations are lagged values of all the variables
B)a single equation, where the regressors are lagged values of all the variables
C)k equations, one for each of the variables, where the regressors in all equations are never more than one lag of all the variables
D)k equations, one for each of the variables, where the regressors in all equations are current values of all the variables

Question

Quizplus · Accepted Answer

A VAR with k time series variables consists of k equations, one for each of the variables, where the regressors in all equations are lagged values of all the variables. This allows for the modeling of the interdependence between the variables over time.

A VAR with K Time Series Variables Consists of