Here is the whole information about question

Now answer the following questions:

(a) You are asked to estimate an econometric model. What kind of model would

you estimate and why? Can you recommend an alternative model? Please be

precise and explain. For this question you are restricted to using only the Oil

Price series.

(b) Next, you are asked to estimate a model of the relationship between real GDP

and oil prices. The plot below shows the level of both series for the US for

annual data since 1870. Suggest TWO empirical models that might be useful in

helping to understand the relationship between the two variables. Your

answer needs to blend 'best practice' in econometrics, based on the

methodologies developed in the course, with existing macroeconomic

thinking about the potential links between these two variables ONLY.

(c) You have tried your best to answer part (b) above. Is there anything else that

you might have wanted to add or to know if you are given the task to model

the relationship between energy prices and economic activity?

the relationship between energy prices and economic activity? you might have wanted to add or to know if you are given the task to model (c) You have tried your best to answer part (b) above. Is there anything else that US dollars 0 4,000 8.000 12,000 16,000 5 20,000 24,000 28,000 32,000 1871 1876 1881 18 86 1891 1896 1901 1906 - OIL_PRICE 1911 1916 1921 1926 1931 1936 - USA_RGDP 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 201 0 20 40 60 80 100 120 price ber barrel (US$)