Could someone please help me with problem 2?

Problem 1: (a) What is spurious regression? Explain. (10) (b) Assuming / =1, randomly generate 1000 observations of variables X and Y using the following equations: X, =px, +e, Y, = PY. +e, (20) Report the graphs of X and Y. (c) Run the regression: Y, =a+//X, +e, and report the estimated results. (10) (d) What did you expect about the magnitudes / and R-square? How are the estimated values different from your expectations? (10) (e) In HW 2 problem 1, you estimated a regression of personal consumption expenditures (PCE) on personal disposable income (PDI). Both PCE and PDI were time series data. Explain why that regression was not spurious. (10) Problem 2: Using data set marco.xls conduct unit-root test of the nominal interest rate and the exchange rate using the following methods: (a) Graphical approach (10) (b) ADF test (15) (c) ACF test (15)