The following table gives data for real consumption expenditure, real income, real wealth, and real interest rates
Question:
a. Given the data in the table, estimate the linear consumption function using income, wealth, and interest rate. What is the fitted equation?
b. What do the estimated coefficients indicate about the variables relationships to consumption expenditure?
Transcribed Image Text:
Yd Wealth Year Interest Rate 1947 1948 1035.2 5166.8 -10.351 976.4 1090.0 998.1 5280.8 -4.720 5607.4 1949 1025.3 1095.6 1.044 1950 1090.9 1192.7 5759.5 0.407 6086.1 1951 1107.1 1227.0 -5.283 1952 1142.4 1266.8 6243.9 -0.277 1953 1954 1197.2 1327.5 6355.6 0.561 1221.9 1344.0 6797.0 -0.138 1955 1310.4 1433.8 7172.2 0.262 7375.2 1956 1348.8 1502.3 -0.736 1957 1381.8 1539.5 7315.3 -0.261 1393.0 7870.0 1958 1553.7 -0.575 1959 1470.7 1623.8 8188.1 2.296 1510.8 8351.8 1960 1664.8 1.511 1720.0 1961 1541.2 8971.9 1.296 1962 1617.3 1803.5 9091.5 1.396 1963 1684.0 1871.5 9436.1 2.058 1964 1784.8 2006.9 10003.4 2.027 1965 1897.6 2131.0 10562.8 2.112 2.020 1966 2006.1 2244.6 10522.0 1967 2066.2 2340.5 11312.1 1.213 2448.2 1.055 1968 2184.2 12145.4 1969 2264.8 2524.3 11672.3 1.732 2314.5 1970 2630.0 11650.0 1.166 1971 2405.2 2745.3 12312.9 -0.712 1972 2550.5 2874.3 13499.9 -0.156 3072.3 1973 2675.9 13081.0 1.414 -1.043 1974 2653.7 3051.9 11868.8 1975 2710.9 3108.5 12634.4 -3.534 2868.9 1976 3243.5 13456.8 -0.657 Year Yd Wealth Interest Rate 1977 2992.1 3360.7 13786.3 -1.190 1978 3124.7 3527.5 14450.5 0.113 1979 3203.2 3628.6 15340.0 1.704 1980 3193.0 3658.0 15965.0 2.298 1981 3236.0 3741.1 15965.0 4.704 1982 3275.5 3791.7 16312.5 4.449 1983 3454.3 3906.9 16944.8 4.691 3640.6 3820.9 1984 4207.6 17526.7 5.848 1985 4347.8 19068.3 4.331 1986 3981.2 4486.6 20530.0 3.768 1987 4113.4 4582.5 21235.7 2.819 1988 4279.5 4784.1 22332.0 3.287 1989 4393.7 4906.5 23659.8 4.318 1990 4474.5 5014.2 23105.1 3.595 1991 4466.6 5033.0 24050.2 1.803 1992 24418.2 25092.3 4594.5 5189.3 1.007 1993 4748.9 5261.3 0.625 1994 4928.1 5397.2 25218.6 2.206 1995 5075.6 5539.1 27439.7 3.333 1996 5237.5 5677.7 29448.2 3.083 1997 5423.9 5854.5 32664.1 3.120 1998 5683.7 6168.6 6320.0 35587.0 3.584 1999 5968.4 39591.3 3.245 2000 6257.8 6539.2 38167.7 3.576
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 61% (13 reviews)
a C t 206327 07340Y d 00360Wealth 55212 Interest t 16085 533762 144882 23067 ...View the full answer
Answered By
Manish Kumar
I always want to interact with those people who are eager for Physics I this is the place where I can do the same .I have been teaching from my graduation. I enjoy teaching.
0.00
0 Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
Refer to Exercise 7.24 and the data in the following table concerning four economic variables in the U.S. from 19472000. a. Based on the regression of consumption expenditure on real income, real...
-
Repeat Exercise 6.20 but refer to the demand for personal computers given in the following equation. Is there a difference between the estimated income elasticities for cell phones and personal...
-
Refer to Example 3.3 in Chapter 3 to complete the following: In Example 3.3 The following table gives data on the number of cell phone subscribers and the number of personal computers (PCs), both per...
-
The Electronic Industries Association reports that about 50% of U.S. households have a camcorder. For a randomly selected sample of 800 U.S. households, use the normal approximation to the binomial...
-
Explain the role of the budget in governmental fund planning, budgetary control, budgetary accounting, and budgetary reporting?
-
What are some advantages and disadvantages of deferring salaries (both from the players and the teams perspectives)?
-
What is the basic principle used in Rayleigh's method?
-
Ogden Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Direct labor and overhead are added evenly throughout the...
-
using the following maturity terms and annual interest rate : Maturity Annual Interest Rate (%) 1 Year 1.25% 2 Years 1.5% 5 Years 2% 10 Years 3% Assuming joe and julia has their first yearly saving...
-
When m-chlorotoluene is treated with sodium amide in liquid ammonia, the products of the reaction are o-, m-, and p-toluidine (i.e., o-CH3C6H4NH2, m-CH3C6H4NH2, and p-CH3C6H4NH2). Propose plausible...
-
If a group of 200 IDDM 30- to 39-year-old men is followed, what is the probability that exactly 2 will go blind over a 1-year period? Ophthalmology, Diabetes A study [12] of incidence rates of...
-
In 2015, the UKs Medicines and Healthcare products Regulatory Agency (MHRA) seized $22 billion worth of counterfeit medicines and devices. Amongst the drugs were slimming pills and anemia tablets....
-
Use the normal distribution in Exercise 13. (a) What percent of the SAT total scores are less than 1200? (b) Out of 500 randomly selected SAT total scores, about how many would you expect to be...
-
How do power dynamics within institutions influence the manifestation of integrity among their members, and what strategies can be employed to mitigate integrity breaches in hierarchical structures ?...
-
Weighted Average Shares At the beginning of 2 0 1 9 , Hardin Company had 3 4 0 , 0 0 0 shares of $ 1 0 par common stock outstanding. During the year, it engaged in the following transactions related...
-
Discuss how two magazine advertisements for the same product (such as a health and beauty product) would be different if one is based on the CPM perspective of consumer information processing and the...
-
Think of a company that has built its business solely on a digital realm. How has it successfully or unsuccessfully built a foundation of trust with its consumers? How has technology enabled the...
-
Consider the following: Net Income Depreciation Expense Gain on Sale of Land Increase in Inventory Increase in Wages Payable Payment of Dividends $51,900 36,000 22,500 6,150 18,450 6,000 Calculate...
-
A powerful tool in solving problems in engineering and physics is the Laplace transform. Given a function f(t), the Laplace transform is a new function F(s) defined by
-
Explain how two samples can have the same mean but different standard deviations. Draw a bar graph that shows the two samples, their means an standard deviations as error bars. T S
-
Discuss why economies of scale in transportation might encourage a producer to include a regional merchant wholesaler in the channel of distribution for its consumer product.
-
Discuss some of the ways that air transportation can change other aspects of a Place system.
-
Explain which transportation mode would probably be most suitable for shipping the following goods to a large Los Angeles department store: a. 300 pounds of Maine lobster. b. 15 pounds of...
-
You are planning for retirement in 20 years and currently have $85,000 in a savings account and $25,000 in a mutual fund. Assuming your savings account returns 4% compounded semi-annually, while your...
-
An Italian company is expecting to receive Kuwait dinars in 9 months' time. The spot rate is Lire/dinar 5.467.Your Company could borrow in dinar at 9% per annum or in Lire at 14% per Annum No forward...
-
Gold coast organics has a total assets turnover of 2.5 and a net profit margin of 3.5 percent.the total debt ratio for the firm is 50 percent.calculate the gold coast organics return On equity.
Study smarter with the SolutionInn App