Answer to Question #268315 in Economics for Nileman

Question

Researcher is using data for a sample of 10 observations to estimate the

relation between consumption expenditure and income. Preliminary analysis

of the sample data produces the following data. (20%)

Y=B+B,X +6,, i=l.

Y=20

2X =100

-r-nFY = 850

x'-x -nXX = 1000

y-XY - nY = 700

- 10,= 2

Hint: the t-value (critical value) of 59% (0.05) =2.306 or -2.603

A, compute OLS estimates of A, and B, and interpret it.

B, calculate the variance and standard deviation of p and B,.

C, Compute the value ofR (coefficient of determination) and interpret the

result.

D, Compute 95% confidence interval for the B, and .

E, Test the significance of the ,.and B, parameter at 5% level of confidence

using t-test

Answer 1

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