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9. Assume the Cobb-Douglas production function for a country is estimated as In(t) = -0.6524 + 0.45 ln(Xt) + 0.67 ln(X2t) = R2 0.98
9. Assume the Cobb-Douglas production function for a country is estimated as In(t) = -0.6524 + 0.45 ln(Xt) + 0.67 ln(X2t) = R2 0.98 n=49 se= (0.6062) (0.1857) (0.09343) t= (-1.08) (2.42) (7.17) where is real GDP, X is national labor input, and X2 is the stock of fixed capital. Please answer the following: a. Is the coefficient of labor input statistically different than 0.5? b. Is the coefficient of the capital input statistically different than 0.6? C. If we know that the Cov(, 2) = .15, can we test the hypothesis that the Cobb-Douglas production function has constant returns to scale? If so, please perform the test at the 5% level of significance. d. Test the hypothesis that Ho: 1=2 = 0. (The two slope coefficients).
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