09 09. From the data for the period 1971 - I to 1988-IV for a country, the I following regression results were obtained:ode to ageloveb In MI, = -10.2571 + 1.5975 In GDP, t = (-12.9422) 2 AIn MI,= 0.0095 + t=(2.4957) 3 Au= -0.1958 vt-1 (25.8863) R = 0.9464 dt al blodszuod od bavlova d = 0.3254 0.5833 Aln GDP, (1.8958) R = 0.0885 d= 1.7399 dong (t = t) (-2.2521) 24 TOW R = 0.1118 d = 1.4767 Where M1 = M1 money supply, GDP = gross domestic product - - measured in billions of BDT, In is natural log, and v, represent the Intrestimated residuals from regression 1. Joqyd ss sid a. Interpret regressions 1 and 2. What is the elasticity of Ml with respect to GDP and is it statistically significant? Why or why not? art staluals bluow goy wod smits b. Do you suspect that regression 1 is spurious? Why? ( C. Is regression 2 spurious? How do you know? From the results of regression 3, would you change your conclusion in b? and why? (hint: 5% critical value is - 1.9495 and 1% critical value is d. 14 2.6277). Now consider the following regression: 8002 AIn M1, = 0.0084 M now 0065 t= (2.0496) (d) 000 -0.0811 v.1 quota (-0.8537) 10.7340 AINGDP, hid evil ni nsmow 800 2000 d = 1.6697 0204 8005 (2.0636) R = 0.1066 REA What does this regression tell you? Does this help you decide if regression 1 is spurious or not? TASOT