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Figure 5.7 in your textbook shows output from an econometric software program called EViews that is estimating the relationship between household income and food expenditure. (a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?

Figure 5.7 in your textbook shows output from an econometric software program called EViews that is estimating the relationship between household income and food expenditure. (a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section: Chapter Questions
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Please show how to answer d).
Figure 5.7 in your textbook shows output from an econometric software program called EViews that is estimating the relationship between household income and food expenditure. (a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?
Transcribed Image Text:Figure 5.7 in your textbook shows output from an econometric software program called EViews that is estimating the relationship between household income and food expenditure. (a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?
Dependent Variable: FOODEXP Method: Least Squares Sample: 1 40 Included Observations: 40 Variable C INCOME Coefficient 40.76756 0.128289 Std. Error 22.13865 0.030539 t-Statistic 1.841465 4.200777 Prob. 0.0734 0.0002
Transcribed Image Text:Dependent Variable: FOODEXP Method: Least Squares Sample: 1 40 Included Observations: 40 Variable C INCOME Coefficient 40.76756 0.128289 Std. Error 22.13865 0.030539 t-Statistic 1.841465 4.200777 Prob. 0.0734 0.0002
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