Which one of the following statements is correct?
a. Based on the OLS regression results, income has a significant and positive
causal impact on consumption.
b. The OLS regression results may be spurious because income and
consumption are not weakly dependent.
c. Even if the income and consumption are highly persistent, the OLS
regression is still valid because we already control for the time trend (t).
d. Based on Figure 1, income and consumption are highly persistent, but
investment is only weakly dependent.
Which one of the following statements is correct?
a. Based on the OLS regression results, income has a significant and positive
causal impact on consumption.
O b. The OLS regression results may be spurious because income and
consumption are not weakly dependent.
O c. Even if the income and consumption are highly persistent, the OLS
d. Based on Figure 1, income and consumption are highly persistent, but
investment is only weakly dependent.