3.6 Suppose L(X|) = N(, 0), where x = (x1,x2), x1 denotes change in personal income, x2...
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3.6 Suppose L(X|θ) = N(θ, 0), where x’ = (x1,x2), x1 denotes change in personal income, x2 denotes change in personal consumption, and Suppose there is one observation x = (5,3)’. Test the hypothesis (at the 5 percent level) that θ = θ0 ≡ (4,4)’ against the alternative that θ ≠ θ0, by computing the statistic y’y, where y = 0–1/2(x–θ0).
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