Give correlation among pi and usd with the given supply, Ask an Expert

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Give correlation among Pi and usd with the given supply and demand function.

Consider a product with a supply function Q1 = β0 + β1 + u1, a demand function Qdi =y0+uid. and a ,market equilibrium condition Qsi = Qdi, where uis and uid are mutually independent i.i.d. random variables, both with a mean of zero.

a. Show that Pi and usd are correlated.

b. Show that the OLS estimator of β0, β1 and γ0?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M919568

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