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FINAL EXAM PART A 1. Exam the results below of a regression. GOP is assumed to b

ID: 3313278 • Letter: F

Question

FINAL EXAM PART A 1. Exam the results below of a regression. GOP is assumed to be a function of the production level in Japan and the unemployment rate Dependent Variable: GDPC96 Method: Least Squares Date: 12/01/17 Time: 09:53 Sample (adjusted): 1957Q1 201303 Included observations: 227 after adjustments Variable Coefficient Std. Error t-Statistic Prob. JAPAN IP UNRATE 472.7414 525.4722 0.899651 0.3693 108.8541 3.86384728.17248 0.0000 32.69333 79.36230 0.411950 0.6808 R-squared 0.786065 Mean dependent var 0.784155 S.D. dependent var 1873.137 Akaike info criterion 7.86E+08 Schwarz criterion -2031,118 Hannan-Quinn criter 411.5246 Durbin-Watson stat 0.000000 8356.534 4031.798 17.92174 17.96701 17.94001 0.013087 Adjusted R-squared S.E. of regression Sum squared resid Log likelwhood F-statistic Prob(F-statistic) Interpret the results. Does the fact that this is a time series cause the economist to be concemed about the results? f so, what are these concens? Can the results be trusted? Why or why not? Are the results compatible with conomic theory?

Explanation / Answer

The regression model is,

GDP= b0+ JAPAN_IP*b1+ UNRATE*b2 +error

Then estimated model is,

GDP= 472.74+ JAPAN_IP*108.85+ UNRATE*32.69 ………………………estimated equation

GDP is depend on some seasonal factors , so time will play very important role in predation

The significant model is

GDP= JAPAN_IP*108.85   ………………………………………………….significant model depending on p-value

From the values of R-square and adj R-square the model is good for the analysis,

R-square =0.78   and Adj-R square =0.78

Thanks