Question: Please solve and show your work for A, B, and C. Please include formula and how you got to the answer. Please explain reasoning. 6.
6. Below are the regression results using the money supply growth rate as the independent variable and the inflation rate as the dependent variable for different countries. Intercept Money Supply Growth Rate Xi Coefficients -0.001071396 0.329020162 Standard Error t Stat 0.006923083 -0.154757027 0.070326482 4.678467495 P-value 0.884507736 0.009458492 A) Based on the regression, if the money supply growth rate increase by 2%, how much do you expect the inflation rate to increase? (Or decrease?) B) Construct the 95% confidence interval of the coefficient on the money supply growth rate. C) Can you claim that the higher money supply growth rate causes higher inflation rate? Why
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