2:10 pm Wed 10 Nov '3' 89%E) vuws.westemsydney.edu.au V Remaining Time: 3 hours. 09 minutes, 20 seconds. as Question Completion Status: > A Moving to another question will save this response. QUEStion 21 10 points Save Answer SECTION B: SHORT ANSWER QUESTIONS You need to answer four (4) questions in this section. THe mark for each question is indicated. The total mark for this part is 40 marks. Question 21: (10 marks) You estimate a model using four explanatory variables. The R2 is very high, at 0.99, but the t-statistics suggest that none of the explanatory variables are statistically significant at the 5% level of signicance. a. What type of econometric problem might you suspect? 2 marks b. Which assumption of the multiple regression model is violated? 2 marks c. What test should you use to identify the problem? 2 marks d. What will be the effect on OLS parameter estimates? 2 marks 6. What might you do to solve this problem? 2 marks Forthe toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B I L1 -5- Paragraph v Open Sans,s... v 10pt V ' E V E V ' A V ' L V ' L 3' Fl] Q ('7 F) '\" P O WORDS POWERED BY TINY > AMovingto another question will savethis response.