For names without a corresponding model equation choose the "Not identified" option. Refer to the assignment instructions for a glossary of variables. 1. Yi = 9-t+e r: = it – n 3. Yt = y; – B (r: – r") – wer + e 4. Tt = T + a (yt – y;) – yAe, + e 2. Fundamental value Keynesian cross Long run growth IS curve Fisher equation Okun's law Phillips curve 4. Fiscal multiplier LM curve
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- The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is S=kYZP where k has been estimated (with past data) to equal 100. If Y=11,000,Z=1,200, and P=20,000, what value would you predict for S? What happens if P is reduced to $17,500? How would you go about developing a value for k? What are the potential weaknesses of this model?tate whether the following statements are true or false with a brief explanation: a) Logit model is estimated by minimising the sum of the squares residuals of the model. b) In difference-in-differences analysis, the assumption of ‘parallel trends’ is generally testable. c) Suppose you have estimated a model Y = 0.2 – 0.7D + 2X + 0.4X*D. Y and X are continuous variables and D is a dummy variable. If D=1, the marginal effect of X on Y is always larger, and therefore the predicted Y is always larger, than in the case where D=0. d) The first order autoregressive model can be stationary or non-stationary. e) The bias in Instrumental Variables estimator depends on the number of observations.Explain how the residuals of an ARMA model can be used to diagnose potential model mis-specification issues? If any, how can these misspecification issues, be addressed?
- In general, what is true about the relationship between the Sum of Squared Residuals in the restricted and unrestricted model? a. SSRr = R-squared * SSRur b. SSRr < SSRur c. SSRr > SSRur d. SSRr = SSRurTRUE OR FALSE. A model with heterosdasticity problem most likely has insignificant parameter estimates.Describe the recommended approach towards determining model specification.How does the R2 help in determining an appropriate model? Is theideal model the one with the highest R2? Should a regressor be included in the model if it increases the model R2?
- a- Write down the economic function for the above estimation by using the information obtained from above table .b- Write down the economic model for the above estimation by using the information obtained from above table . c- Write down the econometric model for the above estimation by using the information obtained from above table .Explain when fixed effects, random effects or pooled OLS models are usually used.What problem with an OLS regression is instrumental variables intended to address? Failure of assumption MLR.1 due to non-linear econometric model. Failure of assumption MLR.5 due to heteroskedastic error. Failure of assumption MLR.4 due to endogenous variables. Failure of assumption MLR.2 due to endogenous variables.
- Consider the following Model (notation is standard):C=c(y-τ) I=i(r) y = C+I+G Md/P = L(y, r) Md= Ms=My = f(n) n = h(W/P) f´(n) = W/P Calculate the effects of a change in τ on C, I, r, y and P.A multiple regression model, K = a + bX + cY + dZ, is estimated regression software, which produces the following output: a. Are the estimates of a, b, c, and d statistically significant at the 1 percent significance level? b. How much of the total variation is explained by this regression equation? c. Is the overall regression equation statistically significant at the 1 percent level of significance? d. If X equals 50, Y equals 200, and Z equals 45, what value do you predict K will take?Econometric theory and methodology a. Econometrics is a "non-experimental" research methodology that involves several logical steps in the formulation and estimation of an econometric model. Describe at least 3 steps in the process. (5 Points) (Please solve If you know the answer).