b) You have collected data for the 50 U.S. states and estimated the following relationship between the change in the unemployment rate from the previous year () and the growth rate of the respective state real GDP (gy). The results are as follows:

= 2.81 0.23gy,R2= 0.36,SER = 0.78

(0.12) (0.04)

a) Calculate 95% confidence interval for1, the regression slope coefficient after calculating the relevant t -statistics.

b) Calculate the p value for the two sided test of the null hypothesis

H0:1 = 0. Do you reject the null hypothesis at the 5% level and 1% level?

c) Construct a 99% confidence interval for0

d) Give one example of a binary variable.