US defense budget outlays, 1962-1981.  In order to explain the US defense budget
, you are asked to consider the following model:

                   Yt = £]1 + £]2X2t + £]3X3t + £]4X4t

Download:  0722.dat ,  0720.xls

(a) Estimate the parameters of this model and their standard errors and obtain R², modified R²
     and adjusted R²  (Eviews) (Rats)

(b) Comment on the results, taking into account any prior expectations you have about the
      relationship between Y and the various X variables. (Suggested Answer)

(c) What other variable(s) might you want to include in the model and why? (Suggested Answer)