252x0781 12/05/07 ECO252 QBA2Final ExamDecember 12-15, 2007Version 1Name and Class hour:_________________________I. (25+ points) Do all the following. Note that answers without reasons and/or citation of appropriatestatistical tests receive no credit. Most answers require a statistical test, that is, stating or implying a hypothesis and showing why it is true or false by citing a table value or a p-value. If you haven’t done it lately, take a fast look at ECO 252 - Things That You Should Never Do on a Statistics Exam (or AnywhereElse). There are over 150 possible points, but the exam is normed on 75 points.In the Lees’ 2000 text they noted that before 1979 the Federal Reserve targeted interest rates, letting the money supply grow in such a way that the interest rates would remain stable. After 1979, the Fed switchedto targeting the money supply. The Lees did a regression of Money supply against GNP (I had to replace this with GDP.), the prime rate (PrRt) and a dummy variable (Dummy) that is 1 before 1979 and zero from 1979 till 1990, when their analysis stops, They report a high R-squared, and extremely significant coefficients for the Prime Rate, GNP and the dummy variable, which seems to tell us that the Fed’s changeof regime had a real effect on the money supply. Later in the text they suggest the addition of an interaction variable (GDPPR), which is the product of the Prime rate and the GDP, and a second interaction variable (GDPPR). I added the year and its square measured from 1958, population, and GDP squared. My attempt to update the Lees results was terrible discouraging. The dependent variable is M1 orits logarithm (logM1). ————— 12/3/2007 11:31:46 PM ———————————————————— Welcome to Minitab, press F1 for help.MTB > WOpen "C:\Documents and Settings\RBOVE\My Documents\Minitab\M1PrRGDP.MTW".Retrieving worksheet from file: 'C:\Documents and Settings\RBOVE\MyDocuments\Minitab\M1PrRGDP.MTW'Worksheet was saved on Mon Dec 03 2007MTB > print c5 c2 c4 c6 c7 c8 c9 c10 c11 c12 c13 c14 c15Data Display Row C5 M1 PrRt GDP Dummy GDPPr GDPdum year yearsq 1 1959 140.0 4.50 $506.60 1 2280 506.6 1 1 2 1960 140.7 5.00 $526.40 1 2632 526.4 2 4 3 1961 145.2 4.50 $544.70 1 2451 544.7 3 9 4 1962 147.8 4.50 $585.60 1 2635 585.6 4 16 5 1963 153.3 4.50 $617.70 1 2780 617.7 5 25 6 1964 160.3 4.50 $663.60 1 2986 663.6 6 36 7 1965 167.8 4.50 $719.10 1 3236 719.1 7 49 8 1966 172.0 5.52 $787.80 1 4349 787.8 8 64 9 1967 183.3 5.50 $832.60 1 4579 832.6 9 81 10 1968 197.4 6.50 $910.00 1 5915 910.0 10 100 11 1969 203.9 8.23 $984.60 1 8103 984.6 11 121 12 1970 214.4 8.00 $1,038.50 1 8308 1038.5 12 144 13 1971 228.3 5.50 $1,127.10 1 6199 1127.1 13 169 14 1972 249.2 5.04 $1,238.30 1 6241 1238.3 14 196 15 1973 262.9 7.49 $1,382.70 1 10356 1382.7 15 225 16 1974 274.2 11.54 $1,500.00 1 17310 1500.0 16 256 17 1975 287.1 7.07 $1,638.30 1 11583 1638.3 17 289 18 1976 306.2 7.20 $1,825.30 1 13142 1825.3 18 324 19 1977 330.9 6.75 $2,030.90 1 13709 2030.9 19 361 20 1978 357.3 8.63 $2,294.70 1 19803 2294.7 20 400 21 1979 381.8 11.65 $2,563.30 0 29862 0.0 21 441 22 1980 408.5 12.63 $2,789.50 0 35231 0.0 22 484 23 1981 436.7 20.03 $3,128.40 0 62662 0.0 23 529 24 1982 474.8 16.50 $3,255.00 0 53708 0.0 24 576 25 1983 521.4 10.50 $3,536.70 0 37135 0.0 25 625 26 1984 551.6 12.60 $3,933.20 0 49558 0.0 26 676 27 1985 619.8 9.78 $4,220.30 0 41275 0.0 27 729 28 1986 724.7 8.50 $4,462.80 0 37934 0.0 28 784 29 1987 750.2 8.25 $4,739.50 0 39101 0.0 29 841 30 1988 786.7 9.00 $5,103.80 0 45934 0.0 30 900 31 1989 792.9 11.07 $5,484.40 0 60712 0.0 31 961 32 1990 824.7 10.00 $5,803.10 0 58031 0.0 32 10241252x0781 12/05/07 33 1991 896.9 8.50 $5,995.90 0 50965 0.0 33 1089 34 1992 1024.8 6.50 $6,337.70 0 41195 0.0 34 1156 35 1993 1129.7 6.00 $6,657.40 0 39944 0.0 35 1225 36 1994 1150.7 7.25 $7,072.20 0 51273 0.0 36 1296 37 1995 1127.4 9.00 $7,397.70 0 66579 0.0 37 1369 38 1996 1081.4 8.25 $7,816.90 0 64489 0.0 38 1444 39 1997 1072.8 8.50 $8,304.30 0 70587 0.0 39 1521 40 1998 1095.9 8.50 $8,747.00 0 74350 0.0 40 1600 41 1999 1123.0 7.75 $9,268.40 0 71830 0.0 41 1681 42 2000 1087.7 9.50 $9,817.00 0 93262 0.0 42 1764 43 2001 1182.0 6.98 $10,128.00 0 70693 0.0 43 1849 44 2002 1219.5 4.75 $10,469.60 0 49731 0.0 44 1936 45 2003 1305.5 4.22 $10,960.80 0 46255 0.0 45 2025 46 2004 1375.2 4.01 $11,685.90 0 46860 0.0 46 2116 47 2005 1373.2 6.01 $12,433.90 0 74728 0.0 47 2209 48 2006 1365.9 8.02 $13,194.70 0 105821 0.0 48 2304Row Pop GDPsq log M1 logM1l 1 176289 256644 4.94164 4.89222 2 179979 277097 4.94663 4.94164 3 182992 296698 4.97811 4.94663 4 185771 342927 4.99586 4.97811 5 188483 381553 5.03240 4.99586 6 191141 440365 5.07705 5.03240 7 193526 517105 5.12277 5.07705 8 195576 620629 5.14749 5.12277 9 197457 693223 5.21112 5.14749 10 199399 828100 5.28523 5.21112 11 201385 969437 5.31763 5.28523 12 203984 1078482 5.36784 5.31763 13 206827 1270354 5.43066 5.36784 14 209284 1533387 5.51826 5.43066 15 211357 1911859 5.57177 5.51826 16 213342 2250000 5.61386 5.57177 17 215465 2684027 5.65983 5.61386 18 217583 3331720 5.72424 5.65983 19 219760 4124555 5.80182 5.72424
View Full Document
Unlocking...