Based on the U.K. data on annual percentage change in wages (Y) and the percent annual unemployment rate (X) for the years 1950 to 1966, the following regression results were obtained:
Ŷt = - 1.4282 + 8.7243(1/Xt)
se = (2.0675) (2.8478) r2= 0.3849
F(l, 15) = 9.39
a. What is the interpretation of 8.7243?
b. Test the hypothesis that the estimated slope coefficient is not different from zero. Which test will you use?
c. How would you use the F test to test the preceding hypothesis?
d. Given that = 4.8 percent and = 1.5 percent, what is the rate of change of Y at these mean values?
e. What is the elasticity of Y with respect to X at the mean values?
f. How would you test the hypothesis that the true r2 = 0?