The demand for cable. The table
on the next page gives data used by a
telephone cable manufacturer to
predict sales to a major customer for
the period 1968 - 1983.
You are consider the following model:
Yi = £]1
+ £]2X2t + £]3X3t
+ £]4X4t + £]5X5t
+ £]6X6t + Ut
(a) Estimate the preceding regression. (Eviews)
(b) What are the expect sign of the coefficients of this model? (Suggested Answer)
(c) Are the empirical results in accordance with the prior expectation? (Suggested Answer)
(d) Are the estimated partial regression coefficients individually statistically
significant at 5% level of
significance? (Suggested
Answer)
(e) Decide is it worth to add X5
and X6 into the regression (Eviews)(Rats)
Which test
do you use? (Suggested
Answer)
