Reference no: EM13117572
1. Present your data in a table showing the names of the variables. Make sure the full definitions and sources of each variable are given.
2. The first equation to be estimated is:
SR i = b0 + b1 GDPi+ b2 PINFi+ ui
where u is a disturbance term and the subscript i represents country.
Answer these questions:
(i) In terms of economic theory what sign would you expect to find for the coefficients in the regression equation?
(ii) It is possible (with a little algebra) to obtain the marginal propensity to consume from this model. Work out an expression for this figure.
(iii) Why is there a constant term in the equation with no variable attached?
(iv) Why do these types of equations have a 'u' term?
3. Estimate equation (1) by OLS and present the results in a suitable table (n.b. marks will be lost for simply pasting over the computer output)
(i) Comment on the results for the coefficients on the GDP and PINF variables.
(ii) Comment on the R squared statistic.
(iii) Is the estimated value of b0 positive or negative? Does it matter for the reliability of your estimates for b1 and b2 whether b0 is positive or negative?
(iv) Examine the residuals of your estimated equation to determine whether any of your countries is a regression residual.
4. Carry out the following hypothesis tests:
(i) b0 = 0 against the two sided alternative at the 1% level
(ii) b1 = 0 against the two sided alternative at the 5% level
(iii) b2 = 0 against the two sided alternative at the 10% level
(iv) b1 = b2 = 0 against the one sided alternative at the 5% level
5. You are now required to estimate the following form of the model using OLS:
SR i = b0 GDPi b1PINF b2 exp u (2)
where u is a classical disturbance term and exp is the value of exponential.
(i) Write down the estimating equation you need to use to estimate (2) by OLS.
(ii) Explain why the disturbance term enters equation (2) in a different form from equation (1)
(iii) What does the coefficient of b2 now represent?
(iv) Explain how the impact of a one unit change in PINF on the savings ratio would be calculated
6. You must now estimate equation (2) Compare your results for equations (1) and (2).
7. You should now write a short report of 450-600 words. This should briefly summarize your findings but most of your answer should consist of further exploration of your data and suggestions for improvement of the model you have estimated.
|
Calculate the quota rent
: Calculate the quota rent and asuming that the quota licenses are given to domestic producers, what is the net effect of the quota on Agronomia's welfare?
|
|
Explain hr roles and responsibilities
: Explain HR Roles and Responsibilities. Use at least five references from the reading assignment, Internet articles, Electronic Reserve Readings articles, or HR journal articles to support your paper
|
|
Is such a trade possible in scenario
: If the local environmental quality in Tennessee declines as a result of this trade, then indicate a potential Coase agreement that could avoid the environmental decline and would still make the trade profitable to both parties ? Is such a trade po..
|
|
Explain how do management and leadership differ
: How do "management" and "leadership" differ and how are "management" and "leadership" similar? Do leaders and managers move between both of these roles?
|
|
Examine the residuals of your estimated equation
: Examine the residuals of your estimated equation to determine whether any of your countries is a regression residual. and present your data in a table showing the names of the variables. Make sure the full definitions.
|
|
Explain what is change leadership
: What is change leadership? Explain a situation in which leadership would use Lewin's model for change
|
|
What is team building
: "Team building" is said to improve group performance; explain how team building helps groups to perform better
|
|
Explain absolute and comparative advantage
: List at least one advantage and one limitation of international trade you encountered in the simulation. Define absolute and comparative advantage in your own words.
|
|
Explain why is it important to use systems analysis
: Why is it important to use systems analysis and design methodologies when building a system? Why not just build the system in whatever way seems to be quick
|