Assume that the econometric model is as follows Yt = β1 + β2X2t + β3X3t + β4X4t + β5X5t + ut You decide to investigate the relationship of the above econometric model using the null hypothesis of H0: β3 + β4 = 1 and β5 = 1. Derive the restricted regression that can be estimated from the above model The regressions are carried out on a sample of 96 quarterly observations, and the residual sums of squares (RSS) for the restricted and unrestricted regressions are 102.87 and 91.41, respectively. Perform the test. What is your conclusion?

Assume that the econometric model is as follows Yt = β1 + β2X2t + β3X3t + β4X4t + β5X5t + ut You decide to investigate the relationship of the above econometric model using the null hypothesis of H0: β3 + β4 = 1 and β5 = 1. Derive the restricted regression that can be estimated from the above model The regressions are carried out on a sample of 96 quarterly observations, and the residual sums of squares (RSS) for the restricted and unrestricted regressions are 102.87 and 91.41, respectively. Perform the test. What is your conclusion?

Elementary Linear Algebra (MindTap Course List)

8th Edition

ISBN:9781305658004

Author:Ron Larson

Publisher:Ron Larson

Chapter5: Inner Product Spaces

Section5.CR: Review Exercises

Problem 62CR

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Question

Assume that the econometric model is as follows

Yt = β1 + β2X2t + β3X3t + β4X4t + β5X5t + ut

You decide to investigate the relationship of the above econometric model using

the null hypothesis of H0: β3 + β4 = 1 and β5 = 1.

Derive the restricted regression that can be estimated from the above model

The regressions are carried out on a sample of 96 quarterly observations, and the residual sums of squares (RSS) for the restricted and unrestricted regressions are 102.87 and 91.41, respectively. Perform the test. What is your conclusion?

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