Reference no: EM13933705
Question 1- Political business cycle: Do economic events affect presidential elections? To test this so-called political business cycle theory, Gary 5rnith20 obtained the following regression results based on the U.S. presidential elections for the four yearly periods from 1928 to 1980 (i.e., the data are for years 1928, 1932, etc.):
Yt^= 53.10 - 1.70Xt
t = (34.10) (-2.67) r2 = 0.37
where Y is the percentage of the vote received by the incumbent and X is the unemployment rate change-unemployment rate in an election year minus the unemployment rate in the preceding year.
a. A priori, what is the expected sign of X?
b. Do the results support the political business cycle theory? Support your contention with appropriate calculations.
c. Do the results of the 1984 and 1988 presidential elections support the preceding theory?
d. How would you compute the standard errors of b1 and b2?
Question 2- Refer to the S.A.T. data given in Table 2-15 on the textbook's Web site. Suppose you want to predict the male math scores on the basis of the female math scores by running the following regression:
Yt = B1 + B2Xt + ut
where Y and X denote the male and female math scores, respectively.
a. Estimate the preceding regression, obtaining the usual summary statistics.
b. Test the hypothesis that there is no relationship between Y and X whatsoever.
c. Suppose the female math score in 2008 is expected to be 490. What is the predicted (average) male math score?
d. Establish a 95% confidence interval for the predicted value in part (c).
Question 3- Consider the following regression results:22
Yt^ = -0.17 + 5.26Xt R2- = 0.10, Durbin-Watson = 2.01
t = (-1.73)(2.71)
where Y= the real return on the stock price index from January of the current year to January of the following year
X = the total dividends in the preceding year divided by the stock price index for July of the preceding year
t = time
Note: On Durbin-Watson statistic, The time period covered by the study was 1926 to 1982.
Note: R2- stands for the adjusted coefficient of determination. The Durbin-Watson value is a measure of autocorrelation. Both measures are explained in subsequent chapters.
a. How would you interpret the preceding regression?
b. If the previous results are acceptable to you, does that mean the best investment strategy is to invest in the stock market when the dividend/price ratio is high?
c. If you want to know the answer to part (b), read Shiller's analysis.
Attachment:- table 2-15.rar
|
What is the net cash flow of the project
: Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,610,000. The fixed asset falls into the three-year MACRS class (MACRS Table). Assume that the tax rate is 40 percent and the requi..
|
|
Specific techniques used by the counselors
: Compare the counseling techniques you observed in the person-centered counseling videos (with the child, Wood), to the counseling techniques you observed in the video that corresponded to the additional chapter you selected in Counseling Children.
|
|
By how much does the scale reading increase
: A beaker of fresh water is in place on the scale when the 1-lb stainless-steel cylinder is added to the beaker. What is the normal force which the cylinder exerts on the bottom of the beaker? By how much does the scale reading increase as the cy..
|
|
Nature of resource cost structure and practical significance
: Identify the nature of resource cost structure and the practical significance of different costs;
|
|
Do economic events affect presidential elections
: Political business cycle: Do economic events affect presidential elections? To test this so-called political business cycle theory, Gary 5rnith20 obtained the following regression results based on the U.S. presidential elections for the four yearl..
|
|
What goals would you have for a first session for your group
: How will you modify your approach so that the two clients with exceptionalities receive differentiated supportive intervention and benefit from the group as much as the other young people?
|
|
Concept of freedom of contract
: Discuss the extent to which, and the ways in which, the courts and parliament have eroded the concept of 'freedom of contract' with reference to relevant case and statute law
|
|
Describe the key fundamentals of systems theory
: This is a succinct literature review of systems theory. At least 4 references sources must be referenced (including Hamilton). The Chicago method of referencing must be used
|
|
What is the importance of the degree of elasticity
: Is demand for courses at the universities that did not increase their fees elastic or inelastic with respect to universities that did increase their fees? What is the importance of this degree of elasticity?
|