1.Econometrics deals with the measurement of economic relationships which are stochastic or random. The simplest form of economic relationships between two variables X and Y can be represented by: ; where are regression parameters and the stochastic disturbance term Justify the reasons for the insertion of U-term in the model? 2.The following data refers to the demand for money (M) and the rate of interest (R) in for eight different economics: Demand for money (M) (In billions) 56 50 46 30 20 35 37 61 Rate of interest (R) (%) 6.3 4.6 5.1 7.3 8.9 5.3 6.7 3.5 a.Assuming a relationship, obtain the OLS estimators ofand b.Calculate the coefficient of determination for the data and interpret its value c.If in a 9th economy the rate of interest is R=8.1, predict the demand for money (M) in this economy.

Please briefly explain why you feel this question should be reported.

Report

Cancel

1.Econometrics deals with the measurement of economic relationships which are stochastic or random. The simplest form of economic relationships between two variables X and Y can be represented by:

; where

are regression parameters and

the stochastic disturbance term

Justify the reasons for the insertion of U-term in the model?

2.The following data refers to the demand for money (M) and the rate of interest (R) in for eight different economics:

Demand for money (M) (In billions)

56

50

46

30

20

35

37

61

Rate of interest (R) (%)

6.3

4.6

5.1

7.3

8.9

5.3

6.7

3.5

a.Assuming a relationship, obtain the OLS estimators ofand

b.Calculate the coefficient of determination for the data and interpret its value

c.If in a 9th economy the rate of interest is R=8.1, predict the demand for money (M) in this economy.

0

Business Boruu Taari 7 months 2025-02-18T15:40:08+05:00 2025-02-18T15:40:08+05:00 0 Answers 8 views Beginner

0