An analyst for a mortgage company wants to better understand the quantitative relationship between housing starts (in 1,000s), the mortgage rate (in %), and the unemployment rate (in%). She gathers seasonally adjusted monthly data on these variables for a five-year period, and estimates a multiple regression model for housing starts as a function of the mortgage rate and the unemployment rate.

a. At the 5% significance level, are the explanatory variables jointly and individually significant?

b. Examine the potential problems of multicollinearity and correlated observations in this time series data application.

Month	Starts	Mortgage	Unemployment
1	2273	6.15	4.7
2	2119	6.25	4.8
3	1969	6.32	4.7
4	1821	6.51	4.7
5	1942	6.60	4.6
6	1802	6.68	4.6
7	1737	6.76	4.7
8	1650	6.52	4.7
9	1720	6.40	4.5
10	1491	6.36	4.4
11	1570	6.24	4.5
12	1649	6.14	4.4
13	1409	6.22	4.6
14	1480	6.29	4.5
15	1495	6.16	4.4
16	1490	6.18	4.5
17	1415	6.26	4.4
18	1448	6.66	4.6
19	1354	6.70	4.7
20	1330	6.57	4.6
21	1183	6.38	4.7
22	1264	6.38	4.7
23	1197	6.21	4.7
24	1037	6.10	5.0
25	1084	5.76	5.0
26	1103	5.92	4.8
27	1005	5.97	5.1
28	1013	5.92	4.9
29	973	6.04	5.4
30	1046	6.32	5.6
31	923	6.43	5.8
32	844	6.48	6.1
33	820	6.04	6.2
34	777	6.20	6.6
35	652	6.09	6.8
36	560	5.33	7.3
37	488	5.06	7.8
38	581	5.13	8.2
39	520	5.00	8.6
40	477	4.81	8.9
41	550	4.86	9.4
42	583	5.42	9.5
43	587	5.22	9.5
44	585	5.19	9.7
45	586	5.06	9.8
46	529	4.95	10.1
47	589	4.88	9.9
48	576	4.93	9.9
49	612	5.03	9.7
50	605	4.99	9.7
51	634	4.97	9.7
52	679	5.10	9.8
53	588	4.89	9.6
54	539	4.74	9.5
55	550	4.56	9.5
56	614	4.43	9.6
57	601	4.35	9.6
58	533	4.23	9.7
59	548	4.30	9.8
60	520	4.71	9.4