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Costs (Y) depend on wage rate (X,), other input costs (X2), overhead costs (X3) and advertising expenditures (X4). With a series of 24 monthly observations,

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Costs (Y) depend on wage rate (X,), other input costs (X2), overhead costs (X3) and advertising expenditures (X4). With a series of 24 monthly observations, a model estimated as follows: ye = 0.75 + 0.24xit + 0.56X2t 0.32x3+ + 0.23X4t (0.07) (0.12) (0.23) (0.5) R2 = 0.79 durbin - Watson statistic = 0.85 The figures in parentheses are the estimated standard errors. You are to test if there is a positive autocorrelation. a. State hypotheses. b. State the decision rule of the test for alpha = 0.01 c. State the conclusion of the test

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