252x0781 12 05 07 ECO252 QBA2 Final Exam December 12 15 2007 Version 1 Name and Class hour I 25 points Do all the following Note that answers without reasons and or citation of appropriate statistical 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 Anywhere Else 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 switched to 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 change of 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 or its 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 My Documents Minitab M1PrRGDP MTW Worksheet was saved on Mon Dec 03 2007 MTB print c5 c2 c4 c6 c7 c8 c9 c10 c11 c12 c13 c14 c15 Data Display Row 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 C5 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 M1 140 0 140 7 145 2 147 8 153 3 160 3 167 8 172 0 183 3 197 4 203 9 214 4 228 3 249 2 262 9 274 2 287 1 306 2 330 9 357 3 381 8 408 5 436 7 474 8 521 4 551 6 619 8 724 7 750 2 786 7 792 9 824 7 PrRt 4 50 5 00 4 50 4 50 4 50 4 50 4 50 5 52 5 50 6 50 8 23 8 00 5 50 5 04 7 49 11 54 7 07 7 20 6 75 8 63 11 65 12 63 20 03 16 50 10 50 12 60 9 78 8 50 8 25 9 00 11 07 10 00 GDP 506 60 526 40 544 70 585 60 617 70 663 60 719 10 787 80 832 60 910 00 984 60 1 038 50 1 127 10 1 238 30 1 382 70 1 500 00 1 638 30 1 825 30 2 030 90 2 294 70 2 563 30 2 789 50 3 128 40 3 255 00 3 536 70 3 933 20 4 220 30 4 462 80 4 739 50 5 103 80 5 484 40 5 803 10 Dummy 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 GDPPr 2280 2632 2451 2635 2780 2986 3236 4349 4579 5915 8103 8308 6199 6241 10356 17310 11583 13142 13709 19803 29862 35231 62662 53708 37135 49558 41275 37934 39101 45934 60712 58031 GDPdum 506 6 526 4 544 7 585 6 617 7 663 6 719 1 787 8 832 6 910 0 984 6 1038 5 1127 1 1238 3 1382 7 1500 0 1638 3 1825 3 2030 9 2294 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 yearsq 1 4 9 16 25 36 49 64 81 100 121 144 169 196 225 256 289 324 361 400 441 484 529 576 625 676 729 784 841 900 961 1024 1 252x0781 12 05 07 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Row 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Pop 176289 179979 182992 185771 188483 191141 193526 195576 197457 199399 201385 203984 206827 209284 211357 213342 215465 217583 219760 222095 224567 227225 229466 231664 233792 235825 237924 240133 242289 244499 246819 249623 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65983 5 72424 5 80182 5 87858 5 94490 6 01249 6 07925 6 16289 6 25652 6 31282 6 42940 6 58576 6 62034 6 66785 6 67570 …
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