Question: Problem 1 Consider the following models: Model I: Yi = B1+ B2Xi + ui Model II: Y* = a1 + 02X, + ui where Y*

Problem 1 Consider the following models: Model I: Yi = B1+ B2Xi + ui Model II: Y* = a1 + 02X, + ui where Y* and X* are standardized variables. Show that 02 = 32 (Sx/Sy) Problem 2 Consider the following models: In Y* = 01 + 02 In X* +uf In Yi = B1 + 32 In Xi + ui where Y* = wiY; and X* = w2Xi, the w's being constants. Establish the relationships between the two sets of regression coefficients and their standard errors

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