this is for econometrics. Please solve for #1.1 (a,b,c) #1.2, #1.3 (only a), and 1.4. Thank you! Don't use excel. Please use regular stats or cal to solve (a) Plot these points on a scatter diagram. Then estimate the regression of nationalincome Y on the quantity of money X and plot the line on the scatter diagram.(b) How do you interpret the intercept and slope of the regression line?(c) If you had sole control over the money supply and wished to achieve a level ofnational income of 12.0 in 1997, at what level would you set the money supply?Explain.1.2 Calculate the regression of income on grade-point average in the example describedin this chapter and compare it with the regression of grade-point average on income.Why are the two results different?1.3 (a) Assume that least-squares estimates are obtained for the relationship Y = a + bX.After the work is completed, it is decided to multiply the units of the X variable by afactor of 10. What will happen to the resulting least-squares slope and intercept?(b) Generalize the result of part (a) by evaluating the effects on the regression ofchanging the units of X and Y in the following manner:%3DY* = c1 + c2YX* = d, + d2XWhat can you conclude?1.4 What happens to the least-squares intercept and the slope estimate when allobservations on the independent variable are identical? Can you explain intuitivelywhy this occurs? EXERCISES1.1 Assume that you are in charge of the central monetary authority in a mythicalcountry. You are given the following historical data on the quantity of money andnational income (both in millions of dollars):Quantityof moneyNationalQuantityof moneyNationalYearincomeYearincome19872.05.019924.07.719882.55.519934.28.419893.26.019944.69.019903.67.019954.89.719913.37.219965.010.0

Name: this is for econometrics. Please solve for #1.1 (a,b,c) #1.2, #1.3 (on
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Description: this is for econometrics. Please solve for #1.1 (a,b,c) #1.2, #1.3 (only a), and 1.4. Thank you! Don't use excel. Please use regular stats or cal to solve (a) Plot these points on a scatter diagram. Then estimate the regression of nationalincome Y on

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this is for econometrics. Please solve for #1.1 (a,b,c) #1.2, #1.3 (only a), and 1.4. Thank you! Don't use excel. Please use regular stats or cal to solve

(a) Plot these points on a scatter diagram. Then estimate the regression of national
income Y on the quantity of money X and plot the line on the scatter diagram.
(b) How do you interpret the intercept and slope of the regression line?
(c) If you had sole control over the money supply and wished to achieve a level of
national income of 12.0 in 1997, at what level would you set the money supply?
Explain.
1.2 Calculate the regression of income on grade-point average in the example described
in this chapter and compare it with the regression of grade-point average on income.
Why are the two results different?
1.3 (a) Assume that least-squares estimates are obtained for the relationship Y = a + bX.
After the work is completed, it is decided to multiply the units of the X variable by a
factor of 10. What will happen to the resulting least-squares slope and intercept?
(b) Generalize the result of part (a) by evaluating the effects on the regression of
changing the units of X and Y in the following manner:
%3D
Y* = c1 + c2Y
X* = d, + d2X
What can you conclude?
1.4 What happens to the least-squares intercept and the slope estimate when all
observations on the independent variable are identical? Can you explain intuitively
why this occurs?

EXERCISES
1.1 Assume that you are in charge of the central monetary authority in a mythical
country. You are given the following historical data on the quantity of money and
national income (both in millions of dollars):
Quantity
of money
National
Quantity
of money
National
Year
income
Year
income
1987
2.0
5.0
1992
4.0
7.7
1988
2.5
5.5
1993
4.2
8.4
1989
3.2
6.0
1994
4.6
9.0
1990
3.6
7.0
1995
4.8
9.7
1991
3.3
7.2
1996
5.0
10.0

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