Discuss which economic theories or relationships you have studied up until now (

Question

Discuss which economic theories or relationships you have studied up until now (not just in this class – in all your economics classes) that could be estimated using the multiple linear regression model. Explain your rationale. Select one or more of the theories or relationships you discussed above and determine what data you would need to estimate such a relationship. Provide examples to support your response. Discuss how the problem you research in the e-Activity was solved using estimation and hypothesis testing. Determine if you would have approached the problem in the same way, and if not, what you might have done differently.

Explanation / Answer

Hi,

The correct answer is as follows;

The multiple linear regression model can be used the to study the Cause and Effect relationship between the macroeconomic variable such as : GDP, Inflation, Stock Price index, FOREX, Interest rate and Gold Price.

H0: Macroeconomic variables do not impact on gold price

H1: Macroeconomic variables impact on gold price

We can propose the following model:

GP = f (GDP, WPI, snp)

               GP=Gold Price

               GDP=Gross Domestic Product

               WPI= Wholesale Price Index

               SNP =S&P 500

The following model can then be applied to the data to arrive at the conclusion

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.