How do you create a model

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Reference no: EM131588836

How do you create a model (based on the attached data; Money Demand Regression) using:

M1 = a + b1interest + b2 time

where a is the intercept estimate, b1 is the coefficient estimate on an interest rate (the interest rate is a proxy for the price of money; or the interest you give up by holding money is the opportunity cost of holding your wealth in the form of money) and b2 is the coefficient estimate on the variable time; time is a proxy for all other things and is to account for the identification problem.

Why do people hold money and why were those variables chosen in the model?

What is the summary output?

What does the Rsquarred (R2) mean?

What does the adjusted Rsquarred (R2)mean

What is the SSE?

What is the F stat? What is the t stats? (this is pure statistics; the null hypothesis is that F is 0; or that a+B1+B2=0; the null is that each coefficient (a, b1, and b2) is 0; does the analysis reject these nulls?

Reference no: EM131588836

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