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Problem:
(a) Why is an error term added to a regression and explain its importance in the OLS procedure?
(b) Suppose we have a linear equation with a constant term, one explanatory variable and an error term, show in details the steps required, using the OLS procedure, to derive the estimates of the constant term and that of the coefficient of the explanatory variable.
(c) Suppose a researcher wants to test whether the returns on a company stock (y) show unit sensitivity to two factors (factor x2 and factor x3) among three considered. The regression is carried out on 144 monthly observations. The regression is: Yt = β1 + β2x2t + β3x3t + β4x4t+ ut
i) What are the restricted and unrestricted regressions?
ii) If the two RSS are 502.4 and 302.8 respectively, perform an F-test of the restriction, showing all the required steps.
(d) How are the t-test and the F-test related and describe in which cases they cannot be applied?
use a graphical illustration to describe briefly what the influence of each of the following be on the market supply of labour,(a) an increase in immigrants, (b) a reduction in wag
Illustrates the stages of the production of an economic conclusion? The production of an economic conclusion generally goes into three stages as follows: Stage 1: It is no
Question 1: i) Use a simple human capital model to explain the rationale for undertaking higher education. ii) Why do some people vary significantly in the amounts of human
A country s choice among the production of education and nuclear submarines is an issue of opportunity cost. Explain the issue using a PPF. Resources are limited whereas
1. Consider the consumption decisions of R.B. Turbo, a new student at Teachers College, Columbia University. Ms. Turbo has only available $1,000 in monthly income to spend on food
any village panchayat in west bengal and get information for doing a project.
what is the nature of microeconomics?
Money facilitates market activities and is essential in complex market systems. With money people can avoid the problems associated with coincidence of wants. Between, these pro
the full detailed of market structure their characteristic ,sources with clear explanation
explain budget line?
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