Use the data in MBAPAY.XLS and statistical software to run the following regression:

where RCONPC = real consumer spending in the USA per capita REALYDPC = real disposable income per capita REALR = real interest rate on one-year Treasury Bonds CC = University of Michigan Index of Consumer Confidence (A) Does AVGPA attain its expected sign? Explain.
(B) Does a test of significance on AVGPA justify its presence in the regression?
(C) Does AVGPA belong in the regression according to Adjusted R2 ? Explain.
(D) Does AVGPA belong in the regression according to the Akaike information criterion? Explain.
(E) Does AVGPA belong in the regression according to the Schwarz criterion? Explain.
(F) Does this regression fit better than the regression from question 4 above? Explain.
(G) Do you think the estimators in MBAPAYi = ˆ + ˆ AVGMAT + ˆ ACRATE + e 0 1 i 2 i i are biased? Inefficient? Neither? Explain.
(H) Do you think the estimators in MBAPAYi = ˆ + ˆ AVGMAT + ˆ ACRATE + ˆ AVGPA + e 0 1 i 2 i 3 i i are biased? Inefficient? Neither? Explain.

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MBAPAY = + AVGMAT + 2 ACRATE; +3AVGPA + ei