Question: In order to complete this problem set, it is helpful to refer to Chapters 1 through 4 in Stock and Watson. This assignment is due

In order to complete this problem set, it is helpful to refer to Chapters 1 through 4 in Stock and Watson. This assignment is due at the beginning of class on Tuesday.

1. In EViews, estimate a linear regression equation using the El Paso vehicle registration and population data from the problem set data workbook. Note that the dependent variable is the number of registered vehicles and population is the explanatory variable. Be sure to interpret the results you obtain.

El Paso

El Paso

County

County

Registered

Population

Vehicles, 1000s

1000s

Year

CARS

POP

1969

182.025

364.022

1970

181.883

360.462

1971

203.869

369.189

1972

212.266

378.364

1973

225.501

398.203

1974

235.533

411.532

1975

274.781

427.292

1976

262.130

440.333

1977

270.361

450.007

1978

282.738

460.611

1979

296.099

472.343

1980

309.533

483.711

1981

290.775

497.523

1982

298.800

511.892

1983

309.533

521.038

1984

328.549

529.668

1985

344.199

538.809

1986

341.486

549.592

1987

344.099

559.479

1988

351.540

568.804

1989

357.254

580.982

1990

356.312

595.350

1991

362.404

608.206

1992

341.702

619.138

1993

347.386

634.044

1994

366.326

646.181

1995

369.504

654.250

1996

396.920

656.482

1997

400.611

665.066

1998

429.326

671.250

1999

443.443

675.397

2000

445.849

681.729

2001

457.576

689.163

2002

477.725

696.446

2003

501.426

705.200

2004

505.459

717.652

2005

533.438

728.095

2006

562.591

744.795

2007

575.054

755.578

2008

567.693

769.930

2009

570.744

786.759

2010

589.193

803.548

2011

597.092

819.796

2012

615.285

832.118

2013

626.930

830.585

2014

641.825

833.370

2015

657.944

831.382

2016

660.861

834.112

2017

671.024

836.087

2018

670.643

835.590

2019

674.628

837.501

2020

670.804

865.984

2021

685.900

867.947

2. Use the regression output to test a null hypothesis that population has no effect on the number of cars registered in El Paso County. Be sure to state the null and alternative hypotheses.

3. Also in EViews, plot a scatter diagram that includes registered vehicles on the vertical axis and population on the horizontal axis. Briefly discuss any information that can be discerned from the graph.

4. Answer Problem 3.5 on Page 90 of Stock and Watson.

5. As the data above indicate, population growth usually leads to more vehicle registrations.

Forecast the number of registered vehicles in El Paso if the population increases to 875 thousand.

When population increased in 2020, did El Paso County vehicle registrations also increase?

Based on real world conditions, explain why this may have occurred.

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