Question: Based on the data for the years 1962 to 1977 for the United States, Dale Bails and Larry Peppers obtained the following demand function for

Based on the data for the years 1962 to 1977 for the United States, Dale Bails and Larry Peppers obtained the following demand function for automobiles:
Ŷt = 5807 + 3.24Xt r2 = 0.22
se = (1.634)
where Y = retail sales of passenger cars (thousands) and X = the real disposable income (billions of 1972 dollars). These for b1 is not given.
a. Establish a 95% confidence interval for B2.
b. Test the hypothesis that this interval includes B2 = 0. If not, would you accept this null hypothesis?
c. Compute the t value under H0:B2 = 0. Is it statistically significant at the 5 percent level? Which t test do you use, one-tailed or two-tailed, and why?

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a The df here are 14 Therefore the 5 critical t value is 2145 So ... View full answer

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