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Learn on the go Open in app Skip to main content EN-US BusinessEconomicsEconomics questions and answersEconometrics Assignment Instructor: Kassie Dessie 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: ; This problem has been solved! You’ll get a detailed solution from a subject matter expert that helps you learn core concepts. See Answer Question: Econometrics Assignment Instructor: Kassie Dessie 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: ; Econometrics Assignment Instructor: Kassie Dessie 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. 3.The following data refers to the price of a good ‘P’ and the quantity of the good supplied, ‘S’. P 2 7 5 1 4 8 2 8 S 15 41 32 9 28 43 17 40 a.Estimate the linear regression line b.Estimate the standard errors of 4.The following results have been obtained from a simple of 11 observations on the values of sales (Y) of a firm and the corresponding prices (X). i)Estimate the regression line of sale on price and interpret the results ii)What is the part of the variation in sales which is not explained by the regression line? iii)Estimate the price elasticity of sales. 5.A sample of 20 observation corresponding to the regression model gave the following data. a. Estimate b. Calculate the variance of our estimates c. Estimate the conditional mean of Y corresponding to a value of X fixed at X=10. 6.Suppose that a researcher estimates a consumptions function and obtains the following results: where The number in parenthesis is t _value; C=Consumption, Yd=disposable income, and numbers in the parenthesis are the ‘t-ratios’ a.Test the significant of Yd statistically using t-ratios b.Determine the estimated standard deviations of the parameter estimates 7.State the assumption of OLS model 8.Given the model: with usual OLS assumptions. Show the expression for the error variance.
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BusinessEconomicsEconomics questions and answersEconometrics Assignment Instructor: Kassie Dessie 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: ;
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You’ll get a detailed solution from a subject matter expert that helps you learn core concepts.
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Question: Econometrics Assignment Instructor: Kassie Dessie 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: ;
Econometrics Assignment
Instructor: Kassie Dessie
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.
3.The following data refers to the price of a good ‘P’ and the quantity of the good supplied, ‘S’.
P
2
7
5
1
4
8
2
8
S
15
41
32
9
28
43
17
40
a.Estimate the linear regression line
b.Estimate the standard errors of
4.The following results have been obtained from a simple of 11 observations on the values of sales (Y) of a firm and the corresponding prices (X).
i)Estimate the regression line of sale on price and interpret the results
ii)What is the part of the variation in sales which is not explained by the regression line?
iii)Estimate the price elasticity of sales.
5.A sample of 20 observation corresponding to the regression model gave the following data.
a. Estimate
b. Calculate the variance of our estimates
c. Estimate the conditional mean of Y corresponding to a value of X fixed at X=10.
6.Suppose that a researcher estimates a consumptions function and obtains the following results:
where
The number in parenthesis is t _value;
C=Consumption,
Yd=disposable income, and numbers in the parenthesis are the ‘t-ratios’
a.Test the significant of Yd statistically using t-ratios
b.Determine the estimated standard deviations of the parameter estimates
7.State the assumption of OLS model
8.Given the model:
with usual OLS assumptions. Show the expression for the error variance.
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