1. Calculate the long-run static equilibrium solution to the following dynamic econometric model 1 answer below »

1. Calculate the long-run static equilibrium solution to the following dynamic econometric model

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2. What might Ramsey’s RESET test be used for? What could be done if it were found that the RESET test has been failed?

3. (a) Why is it necessary to assume that the disturbances of a regression model are normally distributed?

(b) In a practical econometric modelling situation, how might the problem that the residuals are not normally distributed be addressed?