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The following model shows the consumption function given:
Ct = ADtβ2
Where A and β2 are unknown constants and D is disposable income. (a) Show how by taking logarithms of the above equation, a linear equation may be obtained.
(b) interpret β. The estimated model is given by:
log Ct = 55.78 + 0.764 log Dt
R2 = 0.89, values in brackets represent t-ratios.
(c ) Interpret the above results
(d) What the reasons behind the existence of multicollinearity and comment on the measures that can be used to deal with such a problem?
(e) What are the assumptions underlying the Classical Linear Regression Model?
what the third degree price discrimination with case study of two successfull and unsuccessfull cases?
In the diagrams related to bandwagon effect, why do we say when the price is 30$ the demand is 40?
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