Consider the Following to Answer the Question(s) Below

question 10

Multiple Choice

Consider the following to answer the question(s) below:
The average monthly residential mortgage lending rate in Canada is available monthly beginning in 1951. A scatterplot of the residuals against time for 747 months from January 1951 to March 2013 is shown below. The rate peaked in September of 1981 at 21.46%. The Durbin-Watson statistic has a value of D = 0.01.
-What conclusion about autocorrelation in the model can we draw using the value of the Durbin-Watson statistic and the critical limits, dL=1.87736 and dU=1.88270?

• A) There is evidence of positive autocorrelation.
• B) There is evidence of negative autocorrelation.
• C) There is no evidence of positive autocorrelation.
• D) There is no evidence of negative autocorrelation.
• E) As D falls between the critical values, the test is inconclusive.

---

Definitions:

Erik Olin Wright

was a sociologist known for his work on class structures, social stratification, and egalitarian alternative futures within capitalist societies.

Empirical Application

The use of empirical methods, including observation and experimentation, to apply theories or hypotheses in real-world settings.

Marxian Concepts

Ideas and theories developed by Karl Marx that address issues related to social class, economic systems, and the dynamics of capitalism and class struggle.

Competitive Capitalism

An economic system where businesses compete in a free market to gain advantage and success, often leading to innovation and consumer choices.