Estimate a simple regression model relating growth in real per capita consumption $($of nondurables and services$)$ to the growth in real per capita disposable income. Use the change in natural logarithms in both cases.

The estimated equation is: gct$=+$gyt$.$

The coefficient on gyt$$indicates that a $1-$percentage$-$point decrease in the income growth$$the consumption growth on average by approximately$$percentage points.

True or False: The coefficient on gyt$$is$$statistically significant against the two$-$sided alternative at the $5\%$ significance level.

True

False

$($ii$)$

Add a lag of the growth in real per capita disposable income to the equation from part $($i$).$

The estimated equation is: gct$=+$gyt$+$gyt$-1.$

There is$$strong evidence of adjustment lags in consumption growth at the $5\%$ significance level.

True

False

$($iii$)$

Add the real interest rate to the equation from part $($i$).$

The estimated equation is: gct$=+$gyt$+$r$3$t$.$

The real interest rate does not$$affect consumption growth at the $5\%$ significance level.

True

False