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Suppose we have the following simple regression model with AR(1) disturbance: where.The restricted version of the model is.The unrestricted version of the model is.The restrictions being.Can the validity of the restrictions be tested?

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MCQs on Econometrics, which is the use of statistical methods to develop theories or test existing hypotheses in economics or finance. 
 


Suppose we have the following simple regression model with AR(1) disturbance:<br><img src='https://www.fatskills.com/images2/GradExams/5FCFBA64-D5C4-4D6D-95B6-DDCE76543BE4.png' height='18' width='170'/> where<br><img src='https://www.fatskills.com/images2/GradExams/B079F3A1-871A-48E3-98F9-E4F27523BA8E.png' height='17' width='122'/>.<br>The restricted version of the model is<br><img src='https://www.fatskills.com/images2/GradExams/BFF20B3C-0B13-406F-8D4D-F04F8F22E5DF.png' height='20' width='388'/>.<br>The unrestricted version of the model is<br><img src='https://www.fatskills.com/images2/GradExams/9EF4DBB9-01CB-4A3C-8751-DBF5D5ED1101.png' height='18' width='328'/>.<br>The restrictions being<br><img src='https://www.fatskills.com/images2/GradExams/C087DC30-7D7D-44C6-B90F-88A44055C2EF.png' height='18' width='98'/>.<br>Can the validity of the restrictions be tested?





 
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