Question: 3. Consider the following double log model In H. = a+ B In Y +ylnr, + u. where H is the number of single-family dwellings

3. Consider the following double log model In H. = a+ B In Y +ylnr, + u. where H is the number of single-family dwellings per capita, Y is per capita income and r is the interest rate. There are 40 observations of these variables. Suppose one wanted to use an LM test to test for first-order autocorrelation. U a) State the null and alternative hypotheses for no first-order autocorrelation. U b) What is the auxiliary equation? 5 C) How would you calculate the test statistic? 5 d) What is the distribution of the test statistic and degrees of freedom

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