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It would be appreciates if i can get the answers for the question. Suppose you are an Economist at the Reserve Bank and provided the

It would be appreciates if i can get the answers for the question.

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Suppose you are an Economist at the Reserve Bank and provided the following data on investment. Year General Government Investment Private Public Enterprises Investment 1980 4.61 20.78 1981 6.89 19.66 1982 5.48 18.12 1983 3.17 17.76 1984 2.97 14.12 1985 3.10 15.06 1986 2.96 11.77 1987 2.29 13.40 1988 2.54 9.52 1989 3.24 8.80 1990 3.27 9.25 1991 4.01 10.44 1992 2.99 8.47 1993 2.51 11.96 1994 2.58 9.41 1995 2.43 10.33 1996 2.99 13.71 1997 3.20 15.60 1998 3.37 23.58 1999 3.42 18.00 2000 2.91 12.46 2001 3.68 11.62 2002 4.56 14.61 2003 4.05 17.41 2004 3.44 15.06 2005 3.05 16.58 2006 3.21 13.92 2007 2.17 11.20 2008 2.56 18.30 2009 4.03 12.17 2010 2.88 13.00 2011 3.14 14.93 2012 3.47 11.45 2013 4.87 21.09 Source: Reserve Bank of Fiji Note: Both series are measured as percentage of GDP. a) Compute the main measure of variability and identify the expenditure that is more volatile. [2 mark] b) Compute and interpret the correlation between General Government Investment and Private Public Enterprises Investment. [3 marks] c) Use an appropriate graphical tool to examine the nature of relationship between two series. Is a linear model suitable? [3 marks] d) In macroeconomics, you have learnt about crowding-out hypothesis (how government investment spending crowds out private investment spending). Estimate the necessary model to examine this. Report your estimated model and discuss if crowding-out hypothesis is supported. [6 marks] e) Interpret the coefficient of determination. [3 marks] f) Based on your estimation in part d), discuss if the model is suitable for prediction purposes

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