Hard questions for me: Consider the model DISPt = beta 1 + beta DUR + et, (5) wh

Question

Hard questions for me:

Consider the model DISPt = beta 1 + beta DUR + et, (5) where DISP represents factory shipments of disposers and DUR is durable goods expenditures. Using annual observations obtained from the Department of Commerce's Survey of Current Business for years 1954 to 1979. the following least squares regression was estimated. Dips, = - 388 - 24.9DUR, (6) Let et denote the residuals from this equation. Suppose you are interested in testing the residuals for serial correlation and you produce the following estimated regression: e, = 16.6 - 0.194DURt + 0.428 The R2 from this regression is 0.165. What is the actual value of the test statistic for serial correlation? 7.3 1.4 3.2 6.8 None of the above. Consider the model DISPt = beta1 + beta2DUR + et, (7) where DISP represents factory shipments of disposers and DUR is durable goods expenditures. Using annual observations from the Department of Commerce's Survey of Current Business, the following least squares regression was estimated. standard errors are in parentheses below the estimate. Which of the following statements is NOT false? The estimates of the parameters are inconsistent; The estimates of the parameters are biased; The estimates are consistent, biased and the standard errors efficient; The estimates are consistent and unbiased; None of the above. Suppose that the random variable et follows the autoregressive process et = pet - 1 + vt. where the vts are independently and identically distributed random variables with sigma 2 v = 1. Suppose that p = 0.9. what is the variance of et? 0.036; 0.026; 0.54; 0.66; None of the above.

Explanation / Answer

11. (c) 3.2

12. (d) the estimates are consistent and unbiased

13. (b) 0.026

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