Question: (i) In Computer Exercise C7 in Chapter 10, you estimated a simple relationship between consumption growth and growth in disposable income. Test the equation for

(i) In Computer Exercise C7 in Chapter 10, you estimated a simple relationship between consumption growth and growth in disposable income. Test the equation for AR(1) serial correlation

(using CONSUMP).

(ii) In Computer Exercise C7 in Chapter 11, you tested the permanent income hypothesis by regressing the growth in consumption on one lag. After running this regression, test for heteroskedasticity by regressing the squared residuals on gct21 and gc2 t21. What do you conclude?

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