(Continuation from Chapter 4, Number 5) You Have Learned in One

question 16

Essay

(Continuation from Chapter 4, number 5) You have learned in one of your economics courses that one of the determinants of per capita income (the "Wealth of Nations") is the population growth rate. Furthermore you also found out that the Penn World Tables contain income and population data for 104 countries of the world. To test this theory, you regress the GDP per worker (relative to the United States) in 1990 (RelPersInc) on the difference between the average population growth rate of that country $( n )$ to the U.S. average population growth rate $\left( n _ { u s } \right)$ for the years 1980 to 1990 . This results in the following regression output: $$\begin{aligned}\widehat { \operatorname { Re } \text { lPersInc } } = & 0.518 - 18.831 \times \left( n - n _ { u s } \right) , R ^ { 2 } = 0.522 , \text { SER } = 0.197 \\& ( 0.056 ) ( 3.177 )\end{aligned}$$ (a)Is there any reason to believe that the variance of the error terms is
homoskedastic?

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Definitions:

Stretch Marks

Lines or streaks on the skin, often resulting from rapid stretching of the skin due to growth, weight gain, or pregnancy.

Dermis

The dermis is a layer of skin located beneath the epidermis, containing nerve endings, sweat glands, hair follicles, and blood vessels.

Dermis

The thick layer of living tissue below the epidermis that forms the true skin, containing sweat glands, hair follicles, and connective tissue.

Adipocytes

Adipocytes are fat cells that store energy in the form of fat, and they play a crucial role in metabolism, insulation, and cushioning of the body.