An economist with a socioeconomic think tank wishes to learn what influences the cost of living in city A.The economist notices that over the past few years, the cost of living in city A has been rising more robustly than the rest of the nation.The economist is mulling whether or not if the city's unemployment rate and the city's population are contributing to the rapid rise in the city's rising cost of living.

The economist hypothesizes that as more jobs are created in city A, demand for goods and services will rise which will prompt the city's cost of living to rise.The economist expects a positive coefficient.Furthermore, because of the rising employment picture, more people will want to relocate to city A even if they live in cities adjacent to city A.The economist will also expect a positive sign for the coefficient representing the number of people residing in city A.Below is the time series data.

Let X₁be defined as the annual number of jobs created (measured in thousands)

Let X₂be defined as the annual number of people residing in city A (measured in thousands)

Let Y be defined as the annual average cost of living in city A (measured in thousands of dollars)

Round off your answers to the nearest three decimal places.

To receive full credit, you must produce your work, provided it's correct.

X₁X₂Y

81040

101142

141444

141648

121652

102054

Given:

( X^tX) = [5.72 -0.31 -0.14]

-0.31 0.04 -0.01

-0.14 -0.01 0.02

and (X^tY) = [280]

3192

4158

SSE = 14.237

Find:

(a)What is our full model?

(b)Does the full model suffer from serial positive autocorrelation?