Hello I want to know how to solve the question in the photo. There is no data se

Question

Hello I want to know how to solve the question in the photo.

There is no data set. So we have to solve the problem without it.

12. We believe that the marginal propensity to consume (Y) is a linear function of age (A). Consider the data for 48 cities of a country. Let Ni = the population of city the average marginal propensity to consume of the N, persons living in city j: A, -the average age of the N, people in city j . The data set contains Ihe Ni, Y, and A, values for j = 1… . .48. Explain how to estimate the model Y =+ ,1 + u using the GLS method and the data set. (It is assumed that all persons in the country are mutually independent and the errors for the individuals are homoskedastic.) SAMSIUNG

Explanation / Answer

Y is dependent on the variable A. Since the data is mutually exclusive and homoskedastic in nature, a linear regression could be plotted between the variables.

Also GLS is Unbiased (BEST) in nature, putting the mean valus of A and Y will give the values of Beta 1 and beta 2 and hence the correlation and covariance could be found between the variables.

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