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(Situation O) Using Data from the Post-Korean War Period, an Economist

Question 7

Multiple Choice

(Situation O) Using data from the post-Korean war period, an economist modeled annual consumption, yty _ { t } , as a function of total labor income, x1t\mathrm { x } _ { 1 \mathrm { t } } , and total property income, x2t\mathrm { x } _ { 2 \mathrm { t } } , with the following results. Assume data for n=40\mathrm { n } = 40 years were used in the analysis.
y^t=7.81+0.91x1t+0.57x2ts=1.29 Durbin-Watson d=2.09\hat { y } _ { t } = 7.81 + 0.91 x _ { 1 t } + 0.57 x _ { 2 t } \quad s = 1.29 \quad \text { Durbin-Watson } d = 2.09
-For the situation above, give the rejection region for the Durbin-Watson test for autocorrelation of residuals. Use ? = 0.10.


A) d<1.39\mathrm { d } < 1.39
B) d>1.60d > 1.60 or 4d>1.604 - d > 1.60
C) 1.39<d<1.601.39 < \mathrm { d } < 1.60
D) d<1.39\mathrm { d } < 1.39 or 4d<1.394 - \mathrm { d } < 1.39

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