In a study of the relationship between real aggregate consumption and prices in a specific country based on a time series of 104 observations, the following OLS regression function was obtained (standard errors in parentheses), SER=2.85, C₂= 13.74 +0.24P, R² = 0.12, (0.35) (0.05) where C, is logarithm of consumption and P, is logarithm of price. Suppose that, in addition to a consumption equation C₁ =B₁ + B₁P₁+U₂ where the error u, is independently and identically distributed with mean 0 and variance o, a supply equation Q₁ = Yo + Y₁P₁+%₂Zt + vr is considered, where Q, is logarithm of production, Z, is a productivity vari- able independent of u, and ut, and the error term u, is independent of u and is independently and identically distributed with mean 0 and variance o2. Suppose that the equilibrium condition Q = Ct holds. Show that, if B₁ #71, then P₁ B₂-7₁2 (70-B0 + 7/2²/₁ +0₂-14). What is the implication of this relationship for the OLS estimation of the slope parameter 3₁

In a study of the relationship between real aggregate consumption and prices in a specific country based on a time series of 104 observations, the following OLS regression function was obtained (standard errors in parentheses), SER=2.85, C₂= 13.74 +0.24P, R² = 0.12, (0.35) (0.05) where C, is logarithm of consumption and P, is logarithm of price. Suppose that, in addition to a consumption equation C₁ =B₁ + B₁P₁+U₂ where the error u, is independently and identically distributed with mean 0 and variance o, a supply equation Q₁ = Yo + Y₁P₁+%₂Zt + vr is considered, where Q, is logarithm of production, Z, is a productivity vari- able independent of u, and ut, and the error term u, is independent of u and is independently and identically distributed with mean 0 and variance o2. Suppose that the equilibrium condition Q = Ct holds. Show that, if B₁ #71, then P₁ B₂-7₁2 (70-B0 + 7/2²/₁ +0₂-14). What is the implication of this relationship for the OLS estimation of the slope parameter 3₁

Calculus For The Life Sciences

2nd Edition

ISBN:9780321964038

Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Chapter2: Exponential, Logarithmic, And Trigonometric Functions

Section2.CR: Chapter 2 Review

Problem 111CR: Respiratory Rate Researchers have found that the 95 th percentile the value at which 95% of the data...

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