Preview

Tero Bau

Good Essays
Open Document
Open Document
1906 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Tero Bau
Homework-3 solution

Research Methodology

1.The following table gives data on imports, GDP and the Consumer Price Index(CPI) for the United states over the period 1970-1998. You are asked to consider the following model:

Ln(Imports)t=[pic]

a. Estimate the parameters of this model using the data given in the table.

b. Do you suspect that there is multicollinearity in the data?

Table: US Imports, GDP and CPI, 1970-1998

|Observation |CPI |GDP |Imports |Observation |CPI |GDP |Imports |
|1970 |38.8 |1039 |39866 |1985 |107.6 |4213 |338088 |
|1971 |40.5 |1128 |45579 |1986 |109.6 |4452 |368425 |
|1972 |41.8 |1240 |55797 |1987 |113.6 |4742 |409765 |
|1973 |44.4 |1385 |70499 |1988 |118.3 |5108 |447189 |
|1974 |49.3 |1501 |103811 |1989 |124 |5489 |477365 |
|1975 |53.8 |1635 |9818 |1990 |130.7 |5803 |498337 |
|1976 |56.9 |1823 |124228 |1991 |136.2 |5986 |490981 |
|1977 |60.6 |2031 |151907 |1992 |140.3 |6318 |536458 |
|1978 |65.2 |2295 |176002 |1993 |144.5 |6642 |589441 |
|1979 |72.6 |2566 |212007 |1994 |148.2 |7054 |668590 |
|1980 |82.4 |2795
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Qb/501 Week 4
    • 815 Words
    • 4 Pages

    Qb/501 Week 4

    12. Key Question The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. Indicate in each calculation whether you are inflating or deflating the nominal GDP data.…

    • 815 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Gm 545 Project Part 2 Essay
    • 1309 Words
    • 6 Pages

    Gm 545 Project Part 2 Essay

    A) The graph given to us depicts the GDP of five decades and indicates how consumption (consumers), government spending, gross private domestic investment, and net exports have contributed to the economy for the past 50 years. We look at the percentage calculation of each component of GDP. We realize that Government spending is the most stable and after that comes Gross private domestic investment. According to our graph, in 1965 the smallest contribution to GDP was Net Exports with 0.78% of total GDP. These computations were done by taking the sectors contribution and dividing it by the GDP with respect to the year. In 2005, Consumption has the largest contribution to GDP of 70.19% of total GDP.…

    • 1309 Words
    • 6 Pages
    Good Essays
    Read More
  • Powerful Essays

    Eco1102 Assignment 1 David grey
    • 1233 Words
    • 5 Pages

    Eco1102 Assignment 1 David grey

    iii) The calculation will take: final consumption expenditure + gross fixed capital formation + investment in inventories + exports of goods and services - less:imports of goods and services + statistical discrepancy. (In millions for year 2012)…

    • 1233 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Naked Economics Chapter 18 Summary
    • 542 Words
    • 3 Pages

    Naked Economics Chapter 18 Summary

    c) US net exports decline when the uncle buys a new Volvo. US imports rise when a US citizen buys a foreign good, while its exports remain unchanged.…

    • 542 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Econ Final Exam Review
    • 1648 Words
    • 7 Pages

    Econ Final Exam Review

    (5 pts) Apply this model to explain trade between Great Britain and the United States in mid-nineteenth century.…

    • 1648 Words
    • 7 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Eco/252 Midterm Practice Paper
    • 1248 Words
    • 5 Pages

    Eco/252 Midterm Practice Paper

    2) Refer to Table 19-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals…

    • 1248 Words
    • 5 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Eco 372 Week 2
    • 736 Words
    • 3 Pages

    Eco 372 Week 2

    Macroeconomics includes a variety of terms relevant to its study. The following terms help identify key factors that influence the U.S. economy. The Gross Domestic Product (GDP) is a measure of a country’s value based on goods produced, services rendered, government spending, and the difference of exports minus imports. The Real GDP is the measure of the output of GDP…

    • 736 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Final Study Guide - Eco/372 Essay Example
    • 1701 Words
    • 7 Pages

    Final Study Guide - Eco/372 Essay Example

    4. In 2006, U.S. real GDP increased by 3.3 percent. Based on this information, we can infer that the U.S. experienced…

    • 1701 Words
    • 7 Pages
    Good Essays
    Read More
  • Good Essays

    Gm545 Week 2 Case Study
    • 574 Words
    • 3 Pages

    Gm545 Week 2 Case Study

    1. (a.) Suppose nominal GDP in 1999 was $200 billion, and in 2001, it was $330 billion. The general price index in 1999 was 100 and in 2001 it was 150. Between 1999 and 2001, the real GDP rose by what percent?…

    • 574 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Garrett
    • 2734 Words
    • 11 Pages

    Garrett

    A) relationship of prices with the level of GDP when real GDP equals potential GDP.…

    • 2734 Words
    • 11 Pages
    Good Essays
    Read More
  • Good Essays

    Im Quiz 4
    • 2243 Words
    • 9 Pages

    Im Quiz 4

    a. prices of consumer goods dropped by 2% last year, ii) prices of consumer goods uniformly rose at 2% last year, iii) prices of some consumer goods rose by more than 2% and prices for some may have even fallen…

    • 2243 Words
    • 9 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Unit 2 FRQ
    • 331 Words
    • 2 Pages

    Unit 2 FRQ

    D- In 1998, the U.S. gross domestic product exceeded $8.5 trillion even though they contained less than five percent of the world’s population, it accounted for 25 percent of the world’s economy. Unemployment had dropped to its lowest levels in over 30 years. The U.S. was about to enter the 21st century that was bigger than it ever had been before. This success promoted immigration to the U.S.…

    • 331 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Eco 110
    • 258 Words
    • 2 Pages

    Eco 110

    8. Describe the three factors that make the consumer price index an imperfect measure of the cost of living. Then explain how the GDP deflator differs from the CPI.…

    • 258 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Trade and Finance
    • 970 Words
    • 4 Pages

    Trade and Finance

    Since 1980 the U.S. unemployment rate had been declining whereas, the value of total imports steadily increased; a trend that remained in effect until the recession happened in 2008. The U.S. in a net exporter of services, and it exported $630.4 billion in services while only importing $434.6 billion. This caused a trade surplus in services of $195.8 billion. The services that exported were Intellectual property, as measured by royalties and license fees, and financial services, and the other was travel-related services (“Us Economy”). When there is a surplus of imports the price drops, and it can be good for…

    • 970 Words
    • 4 Pages
    Better Essays
    Read More
  • Better Essays

    economics
    • 1050 Words
    • 5 Pages

    economics

    What happens when the dollar-value of goods and services imported into the U.S. exceeds the dollar-value of goods and services exported from the U.S. to other countries? Cite a specific example of a good or service that is imported into the U.S. in greater dollar values than is exported from the U.S. and discuss the effects on U.S. businesses and consumers when imports exceed exports for that specific good or service.…

    • 1050 Words
    • 5 Pages
    Better Essays
    Read More

Related Topics