Question: Use the data in MACRO.XLS and statistical software to run Granger tests to determine if changes in M2 Granger-cause INFL or vice-versa. (A) What are

Use the data in MACRO.XLS and statistical software to run Granger tests to determine if changes in M2 Granger-cause INFL or vice-versa.

(A) What are the appropriate lag lengths? Explain.

(B) What do you conclude? Explain.

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