7 Consider the time series data for the real consumption of households and government from year 1950 to year 2019. Five autoregressive models, AR(1) to AR(5), are estimated as follows,where the t statistics for the corresponding estimated coefficients are in the parentheses, and the size of the samples, n, used for each estimation is also shown in the table.According to the significant lag approach, which model is the optimal under the 5% significance level?AR(1)AR(2)AR(3)AR(4)AR(5)5365.557681.51interceptt stat5854.665041.075689.50(2.44)(2.05)(2.13)0.92(2.13)(2.82)rcont-10.820.920.920.92t stat(315.53)(9.49)(9.41)(9.33)(9.57)-0.26rcont-2-0.18-0.28-0.27t stat(-1.38)(-1.38)(-1.31)(-1.32)rcon-s0.080.020.07t stat(0.64)(0.09)(0.32)rcont-40.06-0.32t stat(0.38)(-1.47)rcont-s0.34t stat(2.32)6565656565AIC18.3018.3018.3318.3618.29BIC18.3718.4018.4618.5218.50O A. AR(2).O B. AR(1).O C. none.D. AR(5).

From the given information, AR(1) AR(2) AR(3) AR(4) AR(5) Intercept 5854.66 5041.07 5365.55…

Answered: Consider the time series data for the…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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