Please solve With the all subparts with the step and explaining solution. Please no reject thank u A. Analyse the statistical significance of the coefficient estimates in Table 1 at the 5% level.B.Consider both the F-statistic (at the 5% level of significance) and the adjusted R- squared as theforecast horizon increases from 1 quarter to 3 years. Interpret these figures for the 3-year horizonoutput in Table 1. Provide some commentary and briefly discuss whether such results areconsistent with PPP theory.C. Which macroeconomic variable(s) are considered statistically significant at the 5% level) andeconomically important for modelling changes in the USD/AUD exchange rate? Are you surprisedby these results?D. The latest forecasts of the key macroeconomic variables are:Use these values to estimate the changeMacroeconomic VariableReal GDP Growth (Australia)Real GDP Growth (US)Expected Inflation Rate (Australia)Expected Inflation Rate (US)Interest Rate (Australia)Interest Rate (US)Forecast3.20%3.30%in the USD/AUD exchange rate in 1years' time. Which currency is expected3.012%5.288%to appreciate based on your calculation?1.638%1.579%Is this consistent with PPP theory? 5. Consider the following econometric structural model of the USD/AUD exchange rate:AUSD/AUD =B +B AGDP +B AGDP +B InfRD +B INTRD +et01 Aus,t 2 US,t 3 t4tt (1)whereAUSD/AUD, is the change in the USD/AUD exchange rate over period t.AGDP is the annual percentage growth rate in real GDP over period t:InfRD, is the inflation rate differential for period : IntRD; is the interest rate differential for periodTable 1 below summarises the regression output of the model presented in Equation 1 usingselected forecast horizons: a 1-quarter horizon, 1-year horizon and a 3-year horizon.Table 1.Variable/Particular1-quarterhorizon0.005(0.732)0.8021-yearhorizon0.0273-yearhorizon0.708Intercept(0.421)1.697(0.000)-1.260(0.502)1.162Real GDP Growth Aus(0.304)-1.041(0.063)1.079(0.307)-2.363(0.03)2.775Real GDP Growth US(0.180)-0.940Inflation Rate Differential(0.222)-0.818(0.114)-2.738(0.183)9.83%2.772(0.597)12.151Interest Rate DifferentialAdjusted R-squaredF-stat(0.439)4.20%1.749(0.150)69(0.000)41.22%10.991(0.000)58Number of observations(0.035)66Note: all numbers appearing in parentheses are p-values.You will need to refer to Table 1 to answer the questions below. Provide concise responses.

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A. Analyse the statistical significance of the coefficient estimates in Table 1 at the 5% lev B.Consider both the F-statistic (at the 5% level of significance) and the adjusted R- squared as t forecast horizon increases from 1 quarter to 3 years. Interpret these figures for the 3-year horiz output in Table 1. Provide some commentary and briefly discuss whether such results a consistent with PPP theory.

A. Analyse the statistical significance of the coefficient estimates in Table 1 at the 5% lev B.Consider both the F-statistic (at the 5% level of significance) and the adjusted R- squared as t forecast horizon increases from 1 quarter to 3 years. Interpret these figures for the 3-year horiz output in Table 1. Provide some commentary and briefly discuss whether such results a consistent with PPP theory.

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter2: Systems Of Linear Equations

Section2.4: Applications

Problem 23EQ: 23. Consider a simple economy with just two industries: farming and manufacturing. Farming consumes...

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