THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 52

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A market researcher is interested in the average amount of money spent per year by college students on clothing.From 25 years of annual data,the following estimated regression was obtained through least squares:
y_t = 48.75 +
+
+
where the numbers in parentheses below the coefficients are the coefficient standard errors,and
y = Expenditure per student,in dollars,on clothes
x₁ = Disposable income per student,in dollars,after the payment of tuition,fees,and room and board.
x₂ = Index of advertising,aimed at the student market,on clothes
-Test the hypotheses H₀ : There is no autocorrelation vs.H₁ : There is autocorrelation,given that: Durbin-Watson Statistic d = 1.89,n = 28,k = 3,and α = 0.01

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Definitions:

Current Liabilities

Short-term financial obligations that are due typically within one year or within a normal operating cycle.

Non-Eligible Dividends

are dividends from a corporation that do not qualify for the enhanced dividend tax credit in the recipient's hands, often because the issuing corporation pays tax at a rate less than the standard corporate rate.

Capital Gains

The profit from the sale of an asset or investment when the selling price exceeds the original purchase price.

Marginal Tax Rates

Marginal tax rates are the rates of tax applied to the next dollar of income, used to determine the tax impact of additional income or deductions.