ECO551: Monetary Economics Assignment, UiTM, Malaysia Explain why econometrics is important for data analysis and Explain what is meant by a consistently estimated parameter

Question 1

a) i) Explain why econometrics is important for data analysis.

ii) Explain what is meant by a consistently estimated parameter.

b) The following table shows the values of exports and Economic Growth of a country.

Let X is Export and Y be Economic Growth, calculate the coefficient of correlation, and interpret it.

i) Regress Y on X (including the intercept) using the OLS method of estimation and write down the equation.

ii) Justify whether the estimated regression can be accepted or otherwise.

iii) Calculate the coefficient of determination and interpret it.

iv) Derive the new regression equation if the measurement unit of investment is in RM million.

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