Description
This is my exam and I have to score at least 90% to pass the class
Consider the regression results of the models presented below. Please provide brief, yet cogent, answers to the prompt questions.
PROMPT QUESTIONS
NUMBER ONE [80 points]. Interpret the results of Model A.
● Is the Model a “good fit” for explaining GDP per capita? Explain.
● Which variables are doing a good job predicting GDP per capita? Explain.
NUMBER TWO. [80 points]. Interpret the results of Model B.
● What happened when we dropped the variable “Unemployment”?
● In what sense is Model B a better specification than Model A?
NUMBER THREE [80 points]. Interpret the results of Model C.
● What happened when we added the variable “Oil Revenue per Capita”?
● In what sense is Model C a better specification than Model B?
● Consider the variable “Public Debt,” it was not signficiant in Model A but it is highly significant in Model C. What should we conclude about the relationship between (y-variable) GDP per Capita and (x-variable) Public Debt? Explain.
NUMBER FOUR [80 points]. Interpret the results of Model D.
● What happened when we transformed the variable Trade Deficit into Trade Deficit per Capita?
● In what sense is Model D a better specification than Model A?
NUMBER FIVE [80 points]. Interpret the results of Model E.
● What is the biggest factor to take into account when comparing the results of Model E with the results of Model A?
● In what sense is Model E a better specification than Model A?
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Explanation & Answer
I wrote as much as possible for each question, so they are on the long side. We could answer more briefly, if needed.
Econometrics Questions
#1. a). The model is a good fit. The proportion of variation in GDP explained by the model is
fairly high (R^2=.562). The model is also significant, at p=.000, indicating that it is better than the
null model. However, it is possible to raise the R^2 even further.
b). Freedom, BudgetDeficit, ForeignInvest, and Savi...