ii.

Using the results, write down the estimated regression equation and
use it to estimate the amount of income which will guarantee a
target weekly food consumption expenditure of 300 USD for a
household with four (4) members.
iii. Suppose another student is claiming that, this is a useless model. Is
his claim correct? Why or why not?
iv. Which variable (if any) would you consider deleting from the model?
Give reason
v. Using the results and 1% level of significance (instead of the 5% level
used by the student), test the hypothesis that the true slope
parameter for income variable is one (1)
vi. Construct a 99% confidence interval for the household size
parameter estimate.
vii. If a variable in a model (like the above regression) is significant at
5% level, can we directly conclude that it is also significant at 10%
level? Why or why not?
viii. Explain how can this student test the assumption of normality of the
error term using the Jarque-Bera (JB) test of normality?
16. A researcher obtained data on macroeconomic variables of a certain
country for the years 2000-2014. The variables were defined as follows:
 Y =Real investment (Trillion $) T = Trend (Time period)
 G = Real GNP (Trillion $); R = Interest Rate (%); P = Inflation (%).

Regressing Real investment on a constant (C), Trend, Real GNP, Interest

Rate and Inflation; the researcher obtained the following results using E-
Views:
Dependent Variable: Y
Method: Least Squares
Date: 11/20/19 Time: 14:22
Sample: 2000 – 2014
Included observations: 15

Variable Coefficient Std. Error t-Statistic P-Value

C -0.509071 0.055128 -9.234394 0.0000

T -0.016580 0.001972 -8.408927 0.0000
G 0.670383 0.054997 12.18941 0.0000
R -0.002326 0.001219 -1.908270 0.0854
P -9.40E-05 0.001347 -0.069768 0.9458

R-squared 0.972433 Mean dependent variable 0.203333

Adjusted R-squared 0.961406 S.D. dependent variable 0.034177
S.E. of regression 0.006714 Akaike info criterion -6.907967
Sum squared residual 0.000451 Schwarz criterion -6.671950
Log likelihood 56.80975 Hannan-Quinn criterion -6.910481
F-statistic 88.18825 Durbin-Watson statistics 1.963642
Prob(F-statistic) 0.000000