Question: Panel 1C and 1D show the Augmented Dickey-Fuller (ADF) test results for the log(exrate) (i.e., LEXRATE) and the log(CP) (i.e., LCP). Why is the ADF

Panel 1C and 1D show the Augmented Dickey-Fuller (ADF) test results for the log(exrate) (i.e., LEXRATE) and the log(CP) (i.e., LCP). Why is the ADF test preferred to the DF test?

Panel 1C (LEXRATE) Panel 1D (LCP) Exogenous: Constant, Linear Trend Exogenous: Constant, Linear Trend Lag Length: 0 (Automatic - based on SIC, maxlag=13) Lag Length: 1 (Automatic - based on SIC, maxlag=13) t-Statistic Prob.* t-Statistic Prob.* Augmented Dickey-Fuller test Augmented Dickey-Fuller test statistic -2.422430 0.3664 statistic -1.613724 0.7827 Test critical Test critical values: 1% level -4.025924 values: 1% level -4.026429 5% level -3.442712 5% level -3.442955 10% 10% level -3.146022 level -3.146165

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q1. The Australian dollar is regarded as a commodity currency. Assuming that demand for iron ore is not affected by changes in commodity prices, this implies that an increase in the commodity price...

Here is the link for the question https://www.rba.gov.au/education/resources/explainers/drivers-of-the-aud-exchange-rate.html Q1. The Australian dollar is regarded as a commodity currency. Assuming...

(b) Panel 1C and 1D show the Augmented Dickey-Fuller (ADF) test results for the log(exrate) (i.e., LEXRATE) and the log(CP) (i.e., LCP). Why is the ADF test preferred to the DF test? [2] (c) Write...

Gold has often been debated as a long-term hedge against inflation. In this question, we will test whether the U.S. data support this proposition. Panel 1A shows the plot of the gold price (GPRICE)...

Q1. Gold has often been debated as a long-term hedge against inflation. In this question, we will test whether the U.S. data support this proposition. Panel 1A shows the plot of the gold price...

The Australian dollar is regarded as a commodity currency. Assuming that demand for iron ore is not affected by changes in commodity prices, this implies that an increase in the commodity price...

Exercise 8-17 Cash Flows; Budgeted Income Statement and Balance Sheet (LO8-2, LO8-3, LO8-4, LO8-9, LO8-10) Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown...

You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company...

One subunit of Atlantic Sports Manufacturing Company had the following financial results last month: Requirements 1. Complete the performance evaluation report for this subunit (round to four...

How should Ahmad-haddad Moghaddam prepare his sales force culturally for selling Zam Zam Cola to European supermarket chains?

John Morris invested $ 2 5 0 0 four times a year in an annuity due at All star investments for a period of 3 years at an interest rate of 1 2 % compounded quarterly. Using the ordinary annuity table,...

Johnstone Co. purchased a put option on Ewing common shares on July 7, 2012, for $240. The put option is for 200 shares, and the strike price is $70. (The market price of a share of Ewing stock on...

Journal entry to correct recording error In the fiscal year ended December 31, 2008, Bostick Enterprises paid $120,000 for equipment, which it had purchased on January 1, 2008 The equipment has an...

Dual effects of transactions on balance sheet equation and journal entries Assume that during 2008, Inheritance Brands, a U.S. manufacturer and distributor, engaged in the following fie transactions....

Miscellaneous transactions and adjusting entries Platinum Fields Limited (Platinum Fields) is a South African platinum producer. Platinum Fields applies IFRS, and reports its results in millions of...

Dominick Corporation is authorized to issue 10,000 shares of $40 par value, 10% preferred stock and 200,000 shares of $5 par value common stock . On January 1, 2012, the ledger contained the...

a) The average wait time in the line = ___ minutes (round your response to two decimal places) b) The average number of customers waiting in the line = ___ cars (Response should be rounded to nearest...

4. Give an example of how the consistency principle can be used to influence others.

6. Give an example of how the liking principle can be used to influence others.

5. Give an example of how the consensus principle can be used to influence others.