An economist wishes to study the impact certain variables have on real GDP along with determining...

  

Transcribed Image Text:

An economist wishes to study the impact certain variables have on real GDP along with determining whether politics has any impact. A multiple regression is done where real GDP is the dependent variable and we have the following explanatory variables: M1 = M1 money supply CPI = Consumer Price Index TREND = trend variable (1, 2, 3,...) PRES= = a dummy variable that equals 1 for when a Democrat is President and O when a Republican is President. For the multiple regression provided below, answer the following questions: a. What is the multiple regression equation? b. Is this a good or bad model? Explain. Use a 0.05 level of significance. c. Using a 0.05 level of significance, which variables are important in explaining real GDP? d. Does it matter what party controls the Presidency with regard to real GDP? Explain. d. Does it matter what party controls the Presidency with regard to real GDP? Explain. SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Regression Residual Total Intercept M1 CPI TREND PRES 0124294257 0.015449062 0.010134348 1.696866787 746 4 741 745 SS F MS Significance F 33.47939829 8.369849573 2.906846871 0.021007251 2133.603457 2.879356892 2167.082855 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% 5.823965488 0.141048417 41.29053859 2.4863E-194 5.547062987 6.160867189 7.77899E-05 3.63396E-65 2.14063738 0032629042 6.44907-06 C.CFG149131 -0.009059564 0007188539 -1.260278872 0207965506 0023171892 0.015052765 0.003401394 0.002521878 1.348754627 0177827835 -0.001549482 0.019352271 -0.063-683-626 0.12659175 -0.503063185 0.615069341 0312204737 0.184837485 An economist wishes to study the impact certain variables have on real GDP along with determining whether politics has any impact. A multiple regression is done where real GDP is the dependent variable and we have the following explanatory variables: M1 = M1 money supply CPI = Consumer Price Index TREND = trend variable (1, 2, 3,...) PRES= = a dummy variable that equals 1 for when a Democrat is President and O when a Republican is President. For the multiple regression provided below, answer the following questions: a. What is the multiple regression equation? b. Is this a good or bad model? Explain. Use a 0.05 level of significance. c. Using a 0.05 level of significance, which variables are important in explaining real GDP? d. Does it matter what party controls the Presidency with regard to real GDP? Explain. d. Does it matter what party controls the Presidency with regard to real GDP? Explain. SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Regression Residual Total Intercept M1 CPI TREND PRES 0124294257 0.015449062 0.010134348 1.696866787 746 4 741 745 SS F MS Significance F 33.47939829 8.369849573 2.906846871 0.021007251 2133.603457 2.879356892 2167.082855 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% 5.823965488 0.141048417 41.29053859 2.4863E-194 5.547062987 6.160867189 7.77899E-05 3.63396E-65 2.14063738 0032629042 6.44907-06 C.CFG149131 -0.009059564 0007188539 -1.260278872 0207965506 0023171892 0.015052765 0.003401394 0.002521878 1.348754627 0177827835 -0.001549482 0.019352271 -0.063-683-626 0.12659175 -0.503063185 0.615069341 0312204737 0.184837485

Answer rating: 100% (QA)

a From the coefficient table of the given regression output we get the regression eq... View the full answer