Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 16, Problem 8E
a)
To determine
Explain the effect in household debt to GDP changes and personal saving rate.
b)
To determine
Possible explanation for the changes.
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The diagram shows what happened to the consumption of lamb in the UK over the period 1974– 2015. How can we explain this dramatic fall in consumption? One way of exploring this issue is to make use of a regression model, which should help us to see which variables are relevant and how they are likely to affect
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1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014
Note: Data from 2015 based on end of financial year.
Source: Based on data in Family Food datasets
UK consumption of lamb: 1974–2017
The following is an initial model fitted to annual data for the years 1974–2010.
QL = 144.0 – 0.137PL – 0.034PB + 0.214PP – 0.00513Y + e (1)
where:
QL is the quantity of lamb sold in grams per person per week; PL is the ‘real’ price of lamb (in pence per kg, 2000 prices); PB is the ‘real’ price of beef (in pence per…
Chapter 16 Solutions
Macroeconomics (Fourth Edition)
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