Two Use the following information to answer the following questions: Suppose the correlation coefficient between inflation and budget deficit is 0.098. 3 = 1.73 0.606 0.513 (0.43) (0.082) (0.118) n=56, 2 = 0.602; 2 = 0.587 3 = 1.62 0.343 0.3821 0.190 0.5691 (0.4) (0.125) (0.134) (0.221) (0.197) n=55, 2 = 0.685; 2 = 0.660 where i3 is interest rate; inf is annual inflation rate and def is the budget deficit as a percentage of GDP. i. What does the correlation coefficient tell us about the assumptions of the OLS regression? ii. Compare the estimated long run propensity (LRP) and the contemporaneous effect of inflation on interest rate. Interpret. iii. Are the lags jointly significant