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Regression Exercise Essay

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Below is an essay on "Regression Exercise" from Anti Essays, your source for research papers, essays, and term paper examples.

Based on the data for the United States for the period 1970 to 1983, the following regression results were obtained:

      GNPt   = -787.4723   + 8.0863M1t     r2 = 0.9912


            se = (         )           (0.2197)


      t= (-10.10001)   (         )


      where GNP is the gross national product (S, in billions) and M1   is the money supply (S, in billions)
      Note:   M1 includes currency, demand deposits, travelers checks, and other checkable deposits.


        a. Fill in the blank parentheses.
        b. The monetarist maintain that the money supply has a significant positive impact on GNP.   How would you test this hypothesis?
        c. What is the meaning of the negative intercept?
        d. Suppose   M1 for 1984 is $552 billion.   What is the mean forecast value GNP for that year?


14.     Table 7-5 gives data on X [net profits after tax in U.S. manufacturing industries ($, in millions)] and Y [cash dividend paid quarterly in manufacturing industries ($, in millions)] for years 1974 to 1986.

        a. What relationship, if any, do you expect between cash dividend and after tax profits?
        b. Plot the scattergram between Y and X.
        c. Does the scattergram support your expectation in part (a)?
        d. If so, do an OLS regression of Y on X and obtain the usual statistics.
        e. Establish a 99% confidence interval for the true slope and test the hypothesis that the true slope coefficient is zero; that is, there is no relationship between dividend and the after-tax profit.


Table 7-5 CASH DIVIDENT (y) AND AFTER-TAX PROFITS (X) IN U.S.
          MANUFACTURING INDUSTRIES, 1974-1986.
|Year                   |Y                     |X                     |Year                   |Y                     |X                   |
|($ in Millions)                                                   |($ in Millions)                                                   |
|1974                   |19,467               |58,747...

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