Question: 3. Suppose you include a time trend in your model of U.S. Personal Consumption Expenditures (billions) on U.S. Personal Income (billions) using quarterly data for

3. Suppose you include a time trend in your model of U.S. Personal Consumption Expenditures (billions) on U.S. Personal Income (billions) using quarterly data for the period 1969Q1- 2013Q3 and you get

Consumption =-69.616+0.877 Income,-4.427 Time Trend,

(13.460 )(0.007 )(0.572 )

n=179

R=.9995

a) Explain how to create the time trend variable.

b) Interpret the time trend variable and comment if it is statistically significant.

c) Explain how to detrend both the dependent and independent variable.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Mathematics Questions!

Professor Ray C. Fair's voting model was introduced in Exercise 2.23. He builds models that explain and predict the U.S. presidential elections. See his website at...

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...

Question: What as the average weekly safety inventory level of refined sugar from the beginning January 2022 to the end of July 2022? A. 512,465.9691 metric tons per week B. 316,002.1474 metric tons...

Suppose that one worker can shovel snow from a storefront sidewalk in 50 minutes and another worker can shovel it in 30 minutes. How long will it take if they work together?

Natalie decides that she cannot afford to hire John to do her accounting. One way that she can ensure that her cash account does not have any errors and is accurate and up-to-date is to prepare a...

INTERNAL CONTROL SYSTEM Required: A list of terms and another list of definitions and examples are presented below. Make a list numbered 1 through 5 and match the letter of the most directly related...

The time, in hours, it takes to repair the fault in a machine has a continuous distribution with density function If the cost associated with the machine not working for x hours is 3x + 2, calculate...

Why must firms have reliable suppliers when using just-in-time methods?

Exemptions under the DMCA include: Question 9 options: a ) nonprofit libraries circumventing for the purpose of determining whether to lawfully purchase copyrighted material. b ) encryption research....

Can someone help me with the calculations here? SECTION A - Transactional Analysis 50 marks A company offering both products and services was established on 1 January 2019. Enter the transactions for...

Throughout Clay's speech on the environment, he reviewed points previously discussed before introducing new points. What is the textbook term for this technique? preview O transition O internal...

Perez POPS Please read the instructions carefully. A new client of yours, Katie Perez wants to open an ice cream shop near the downtown shopping center. She will selling Frozen POPS, Frozen Ices,...

Duncan Hines produces a boxed cake mix that features Toll House chocolate chips. This is an example of rebranding. Group of answer choices false true

One of the weaknesses of Feeding trials is that the diet consumption may not be quantified

On January 1, 2025, a new Board of Directors was elected for Cullumber Hospital. The new board switched to a different accountant. After reviewing the hospital's books, the accountant decided that...

A D 3 2 From the closed "Taccount below please answer the questions that follow. (6 Points) 4 5 Income Summary 137.600 51,600 189,200 51,600 0 10 a. Total Revenues were? 11 b. Total Expenses were? 12...

What mass of KBr (in grams) should you use to make 350.0 mL of a 1.30 M KBr solution?

=+1. How do individuals apply their wisdom-related knowledge to real-life problems requiring complex and consequential decisions?

=+2. Human adaptive systems often require experience and learning or calibration to reach their full potential, just as our immune system needs some exposure to challenges in order to become...

=+1. Can we develop reliable and valid non-selfreport measures of happiness?