Question Two i) a) State whether the following statements are True or False. Briefly justify your answer. When autocorrelation is present, OLS estimators are biased as well as inefficient. A significant Durbin-Watson DW does not necessarily mean there is autocorrelation of the first order. 11) b) Given a sample of 40 observations and 4 explanatory variables, what can you say about autocorrelation if the Durbin-Watson statistic is: (i) DW = 1.05 (ii) DW=1.40 DW = 2.50 (111) (iv) DW = 3.97 c) In studying the movement in the production workers' share in value added (i.e. labor's share) in manufacturing industries, the following regression results were obtained based on U.S data for the years 1949 to 1964 (t ratios in parenthesis) i) ii) iii) Model A: t = 0.4529 0.0041t, r = 0.5284, d = 0.8252 Model B: t = 0.4786 -0.00127t + 0.0005t, r = 0.6629, d = 1.82 Is there serial correlation in model A? In model B? If there is serial correlation in model A but not in model B, what accounts for serial correlation in the former? What does this example tell us about the usefulness of DW - Statistic in detecting autocorrelation?