Q1. (a) Random Effects Model (REM) is better than Fixed Effects Model (FEM). Is this statement true? Explain. (12 marks) (b) Patrick intends to reveal the determinants of gasoline demand in Korea, Japan, Taiwan, and China. He has collected the data on gasoline consumption of cars per capita (Y). real income per capita (Xi) and real gasoline price (X.) from those countries from 2009 to 2018. However, he has a lack of knowledge about Econometric modelling. As a friend of him, you may assist him on the empirical analysis (1) A priori, what is expected relationship between Y and X.? Justify. (4 marks) Which data analysis will you suggest Patrick to use in his study? Why? (5 marks) There are TWO (2) alterative ways of estimating Fixed Effect Model (FEM) using least square dummies variable LSDV) approach. State the FEM model in Patrick's study using these two approaches to marks) 3 Assuming that Patrick has estimated a pooled ordinary least squares model with the R of 0.8208 and a FEM model with three dummy variables and its R.4 Between pooled OLS Model and FEM which model is more preferable! Explain 213 marks Tocal marksi Q1. (a) Random Effects Model (REM) is better than Fixed Effects Model (FEM). Is this statement true? Explain. (12 marks) (b) Patrick intends to reveal the determinants of gasoline demand in Korea, Japan, Taiwan, and China. He has collected the data on gasoline consumption of cars per capita (Y). real income per capita (Xi) and real gasoline price (X.) from those countries from 2009 to 2018. However, he has a lack of knowledge about Econometric modelling. As a friend of him, you may assist him on the empirical analysis (1) A priori, what is expected relationship between Y and X.? Justify. (4 marks) Which data analysis will you suggest Patrick to use in his study? Why? (5 marks) There are TWO (2) alterative ways of estimating Fixed Effect Model (FEM) using least square dummies variable LSDV) approach. State the FEM model in Patrick's study using these two approaches to marks) 3 Assuming that Patrick has estimated a pooled ordinary least squares model with the R of 0.8208 and a FEM model with three dummy variables and its R.4 Between pooled OLS Model and FEM which model is more preferable! Explain 213 marks Tocal marksi