When Estimating a Multiple Regression Model Based on 30 Observations,the

question 50

Essay

When estimating a multiple regression model based on 30 observations,the following results were obtained. a.Specify the hypotheses to determine whether x₁ is linearly related to y.At the 5 % significance level,use the p-value approach to complete the test.Are x₁ and y linearly related?
B)Construct the 95% confidence interval for β₂.Using this confidence interval,is x₂ significant in explaining y? Explain.
C)At the 5% significance level,can you conclude that β₁differs from -1? Show the relevant steps of the appropriate hypothesis test.

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Definitions:

Macroeconomic Equilibrium

A state in which aggregate supply equals aggregate demand, leading to an economy operating at its full capacity.

Aggregate Purchases

The total amount of goods and services bought in an economy over a specific period of time.

Average Price Level

A measure of the overall level of prices of goods and services in an economy over a period of time.

Imports and Exports

Transactions involving the buying (imports) and selling (exports) of goods and services between countries.