(Situation N) an Economist Wishes to Study the Monthly Trend $E \left( Y _ { t } \right) = \beta _ { 0 } + \beta _ { 1 } t$

question 54

Multiple Choice

(Situation N) An economist wishes to study the monthly trend in the Dow Jones Industrial Average (DJIA) . Data collected over the past 40 months were used to fit the model $E \left( Y _ { t } \right) = \beta _ { 0 } + \beta _ { 1 } t$ , where $y =$ monthly close of the DJIA and $t =$ month $( 1,2,3 , \ldots , 40 )$ . The regression results appear below:
$$\hat { y } = 88 + 0.25 t \quad R ^ { 2 } = 0.37 \quad \text { MSE } = 144 \quad F = 4.25 \quad \text { Durbin-Watson } \mathrm { d } = 0.96$$
-What is the value of the test statistic for testing whether autocorrelation exists in the data?

• A) 4.25
• B) 0.25
• C) 0.37
• D) 0.96

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Definitions:

Elastic Demand

A situation where the quantity demanded of a good or service changes significantly in response to price changes.

Inelastic Supply

A supply condition where quantity supplied does not change significantly when there is a change in price.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, leading to a reduction in total surplus.

Excess Burden

A measure of the economic loss that can occur when market behavior is distorted, often due to inefficient taxation or government policies.