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Consider the following simultaneous equation model: Y, =B, +BY, +QX +u Y, =B +BY+QX+u, (a) Obtain the reduced-form equations for this model. (b) What is

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Consider the following simultaneous equation model: Y, =B, +BY, +QX +u Y, =B +BY+QX+u, (a) Obtain the reduced-form equations for this model. (b) What is the relationship between the reduced-form coefficients from (@) above, and the structural coefficients? (c) Given that the estimated reduced-form equations are as follows (error terms are now omitted): Y. =4+ 3X. + 8X

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