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Suppose we are interested in estimating the relationship between output (GDP) and Labour (L) and Capital (K) Could we estimate the following model (as is) to get B1 and B2 with OLS? Explain. Y Bo KLu

Suppose we are interested in estimating the relationship between output (GDP) and Labour (L) and Capital (K) Could we estimate the following model (as is) to get B1 and B2 with OLS? Explain. Y Bo KLu

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q3 d How would you test that there are constant returns to scale with an f-test? Carefully explain. Be sure to specify your test statistic and how you would calculate it, explain how it is distributed, and how you would reach a conclusion about your test.
Transcribed Image Text:Q3 d How would you test that there are constant returns to scale with an f-test? Carefully explain. Be sure to specify your test statistic and how you would calculate it, explain how it is distributed, and how you would reach a conclusion about your test.
Q3a Suppose we are interested in estimating the relationship between output (GDP) and Labour (L) and Capital (K). Could we estimate the following model (as is) to get B1 and B2 with OLS? Explain Y = Bo + Ki Lu,
Transcribed Image Text:Q3a Suppose we are interested in estimating the relationship between output (GDP) and Labour (L) and Capital (K). Could we estimate the following model (as is) to get B1 and B2 with OLS? Explain Y = Bo + Ki Lu,
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