(a) What kinds of variables are likely to be non-stationary? How can such variables be made stationary?

(b) Why is it in general important to test for non-stationarity in time series data before attempting to build an empirical model?

(c) Define the following terms and describe the processes that they represent

(i) Weak stationarity

(ii) Strict stationarity

(iii) Deterministic trend

(iv) Stochastic trend.

AppendixLO1