YEAR QUARTER MZM FFUNDS CPI YD TREND

1970 1 464.000 8.573 38.100 3576.900 1

1970 2 457.800 7.880 38.633 3621.067 2

1970 3 463.100 6.703 39.033 3678.933 3

1970 4 472.533 5.567 39.600 3670.100 4

1971 1 483.600 3.857 39.933 3743.300 5

1971 2 497.333 4.563 40.300 3797.767 6

1971 3 509.000 5.473 40.700 3817.667 7

1971 4 518.000 4.750 41.000 3862.200 8

1972 1 529.333 3.540 41.333 3879.900 9

1972 2 538.933 4.300 41.600 3920.167 10

1972 3 552.000 4.740 41.933 3996.400 11

1972 4 565.933 5.143 42.367 4156.567 12

1973 1 574.833 6.537 43.033 4188.100 13

1973 2 579.933 7.817 43.933 4223.433 14

1973 3 583.833 10.560 44.800 4242.533 15

1973 4 587.033 9.997 45.933 4288.933 16

1974 1 593.433 9.323 47.300 4217.933 17

1974 2 597.933 11.250 48.567 4178.600 18

1974 3 602.933 12.090 49.933 4182.333 19

1974 4 611.167 9.347 51.467 4176.667 20

1975 1 621.900 6.303 52.567 4170.500 21

1975 2 641.433 5.420 53.200 4363.400 22

1975 3 661.567 6.160 54.267 4299.900 23

1975 4 673.967 5.413 55.267 4333.700 24

1976 1 695.100 4.827 55.900 4385.867 25

1976 2 715.400 5.197 56.400 4410.800 26

1976 3 729.467 5.283 57.300 4445.233 27

1976 4 753.067 4.873 58.133 4473.467 28

1977 1 776.633 4.660 59.200 4483.500 29

1977 2 792.067 5.157 60.233 4525.567 30

1977 3 805.967 5.820 61.067 4588.433 31

1977 4 821.200 6.513 61.967 4676.167 32

1978 1 835.133 6.757 63.033 4712.933 33

1978 2 847.433 7.283 64.467 4762.833 34

1978 3 850.633 8.100 65.967 4799.800 35

1978 4 851.733 9.583 67.500 4831.400 36

1979 1 840.400 10.073 69.200 4889.800 37

1979 2 846.967 10.180 71.400 4845.800 38

1979 3 862.433 10.947 73.700 4867.767 39

1979 4 852.633 13.577 76.033 4876.133 40

1980 1 851.500 15.047 79.033 4892.967 41

1980 2 836.200 12.687 81.700 4850.067 42

1980 3 888.900 9.837 83.233 4904.500 43

1980 4 898.933 15.853 85.567 4972.000 44

1981 1 882.500 16.570 87.933 4965.100 45

1981 2 911.867 17.780 89.767 4970.900 46

1981 3 924.633 17.577 92.267 5078.067 47

1981 4 953.233 13.587 93.767 5083.700 48

1982 1 979.933 14.227 94.600 5095.967 49

1982 2 993.467 14.513 95.967 5126.767 50

1982 3 1015.333 11.007 97.633 5151.333 51

1982 4 1073.267 9.287 97.933 5167.500 52

1983 1 1275.033 8.653 98.000 5216.233 53

1983 2 1356.967 8.803 99.133 5252.433 54

1983 3 1373.233 9.460 100.100 5331.167 55

1983 4 1378.267 9.430 101.100 5449.933 56

1984 1 1399.367 9.687 102.533 5558.633 57

1984 2 1426.733 10.557 103.500 5651.133 58

1984 3 1422.967 11.390 104.400 5725.733 59

1984 4 1459.833 9.267 105.300 5772.467 60

1985 1 1532.300 8.477 106.267 5757.567 61

1985 2 1573.700 7.923 107.233 5869.533 62

1985 3 1628.967 7.900 107.900 5851.233 63

1985 4 1665.367 8.103 109.000 5913.100 64

1986 1 1697.167 7.827 109.567 5990.833 65

1986 2 1773.633 6.920 109.033 6067.433 66

1986 3 1855.567 6.207 109.700 6106.233 67

1986 4 1934.133 6.267 110.467 6115.467 68

1987 1 1986.500 6.220 111.800 6171.833 69

1987 2 2013.633 6.650 113.067 6113.800 70

1987 3 2012.133 6.843 114.267 6223.433 71

1987 4 2010.800 6.917 115.333 6307.333 72

1988 1 2026.000 6.663 116.233 6399.900 73

1988 2 2052.133 7.157 117.567 6465.800 74

1988 3 2055.233 7.983 119.000 6528.200 75

1988 4 2049.933 8.470 120.300 6589.867 76

1989 1 2032.200 9.443 121.667 6664.800 77

1989 2 2012.800 9.727 123.633 6645.233 78

1989 3 2050.667 9.083 124.600 6689.367 79

1989 4 2103.000 8.613 125.867 6746.000 80

1990 1 2146.167 8.250 128.033 6797.767 81

1990 2 2170.400 8.243 129.300 6845.100 82

1990 3 2205.000 8.160 131.533 6842.800 83

1990 4 2235.833 7.743 133.767 6784.300 84

1991 1 2292.067 6.427 134.767 6801.300 85

1991 2 2361.100 5.863 135.567 6851.000 86

1991 3 2407.700 5.643 136.600 6878.967 87

1991 4 2473.633 4.817 137.733 6936.167 88

1992 1 2578.467 4.023 138.667 7075.767 89

1992 2 2649.633 3.770 139.733 7145.933 90

1992 3 2714.000 3.257 140.800 7179.133 91

1992 4 2770.433 3.037 142.033 7211.667 92

1993 1 2784.767 3.040 143.067 7238.767 93

1993 2 2826.533 3.000 144.100 7261.233 94

1993 3 2863.567 3.060 144.767 7267.533 95

1993 4 2905.467 2.990 145.967 7317.933 96

1994 1 2923.067 3.213 146.700 7366.333 97

1994 2 2934.400 3.940 147.533 7440.467 98

1994 3 2922.033 4.487 148.900 7483.933 99

1994 4 2902.967 5.167 149.767 7591.267 100

1995 1 2867.933 5.810 150.867 7656.200 101

1995 2 2869.900 6.020 152.100 7677.900 102

1995 3 2932.033 5.797 152.867 7748.267 103

1995 4 2967.033 5.720 153.700 7793.533 104

1996 1 3023.233 5.363 155.067 7867.333 105

1996 2 3079.333 5.243 156.400 7939.400 106

1996 3 3127.967 5.307 157.300 8003.700 107

1996 4 3178.167 5.280 158.667 8046.367 108

1997 1 3237.133 5.277 159.633 8123.000 109

1997 2 3288.833 5.523 160.000 8195.033 110

1997 3 3363.900 5.533 160.800 8291.433 111

1997 4 3442.800 5.507 161.667 8413.567 112

1998 1 3535.967 5.520 162.000 8590.667 113

1998 2 3649.600 5.500 162.533 8708.800 114

1998 3 3761.700 5.533 163.367 8796.533 115

1998 4 3930.800 4.860 164.133 8866.200 116

1999 1 4048.167 4.733 164.733 8946.300 117

1999 2 4145.833 4.747 165.967 8966.467 118

1999 3 4221.933 5.093 167.200 9027.667 119

1999 4 4306.167 5.307 168.433 9163.233 120

2000 1 4396.033 5.677 170.100 9338.733 121

2000 2 4473.433 6.273 171.433 9441.933 122

2000 3 4555.233 6.520 173.000 9551.633 123

2000 4 4648.533 6.473 174.233 9585.733 124

2001 1 4873.067 5.593 175.900 9672.567 125

2001 2 5124.400 4.327 177.133 9655.767 126

2001 3 5320.333 3.497 177.633 9878.600 127

2001 4 5598.000 2.133 177.500 9753.667 128

2002 1 5753.167 1.733 178.067 9973.567 129

2002 2 5831.400 1.750 179.467 10041.033 130

2002 3 5931.433 1.740 180.433 10032.267 131

2002 4 6082.700 1.443 181.500 10091.900 132

2003 1 6196.733 1.250 183.367 10115.633 133

2003 2 6280.800 1.247 183.067 10238.900 134

2003 3 6440.200 1.017 184.433 10412.033 135

2003 4 6402.267 0.997 185.133 10439.333 136

2004 1 6434.033 1.003 186.700 10487.433 137

2004 2 6577.467 1.010 188.167 10607.533 138

2004 3 6621.133 1.433 189.367 10676.867 139

2004 4 6657.800 1.950 191.400 10811.567 140

2005 1 6646.700 2.470 192.367 10685.000 141

2005 2 6651.467 2.943 193.667 10786.467 142

2005 3 6732.867 3.460 196.600 10818.200 143

2005 4 6815.133 3.980 198.433 10956.933 144

2006 1 6883.667 4.457 199.467 11170.033 145

2006 2 6936.967 4.907 201.267 11197.400 146

2006 3 7028.500 5.247 203.167 11226.333 147

2006 4 7165.300 5.247 202.333 11374.500 148

2007 1 7279.733 5.257 204.317 11471.333 149

2007 2 7471.333 5.250 206.631 11500.800 150

2007 3 7742.233 5.073 207.939 11511.000 151

2007 4 8056.433 4.497 210.490 11518.800 152

2008 1 8377.933 3.177 212.770 11550.800 153

2008 2 8687.167 2.087 215.538 11761.867 154

2008 3 8792.267 1.940 218.861 11515.000 155

2008 4 8986.567 0.507 213.849 11615.667 156

2009 1 9407.800 0.183 212.378 11565.533 157

2009 2 9594.600 0.180 213.507 11689.967 158

2009 3 9622.000 0.157 215.344 11557.633 159

2009 4 9570.133 0.120 217.030 11554.767 160

2010 1 9478.467 0.133 217.374 11619.767 161

2010 2 9430.833 0.193 217.297 11811.200 162

2010 3 9550.233 0.187 217.934 11895.300 163

2010 4 9709.667 0.187 219.699 11961.933 164

2011 1 9798.500 0.157 222.044 12083.967 165

2011 2 10054.733 0.093 224.568 12057.533 166

2011 3 10409.633 0.083 226.033 12110.233 167

2011 4 10576.933 0.073 227.047 12147.833 168

2012 1 10759.633 0.103 228.326 12375.233 169

2012 2 10928.633 0.153 228.808 12487.767 170

2012 3 11165.267 0.143 229.841 12398.400 171

2012 4 11411.133 0.160 231.369 12741.933 172

2013 1 11616.467 0.143 232.299 12231.967 173

2013 2 11764.367 0.117 232.045 12323.033 174

2013 3 11961.833 0.083 233.300 12376.300 175

2013 4 12172.200 0.087 234.163 12425.200 176

2014 1 12341.800 0.073 235.608 12614.433 177

2014 2 12502.100 0.093 236.839 12765.933 178

2014 3 12654.400 0.090 237.459 12906.900 179

2014 4 12854.000 0.100 236.920 13065.200 180

2015 1 13100.667 0.110 235.355 13226.633 181

2015 2 13266.367 0.123 236.912 13327.800 182

2015 3 13486.200 0.137 237.816 13440.367 183

2015 4 13688.467 0.160 237.888 13471.367 184

2016 1 13886.167 0.360 237.848 13562.233 185

2016 2 14168.567 0.373 239.452 13541.500 186

2016 3 14404.500 0.397 240.548 13592.900 187

2016 4 14550.967 0.450 242.177 13685.367 188

2017 1 14685.400 0.700 243.949 13835.367 189

2017 2 14866.267 0.950 244.010 13909.800 190

2017 3 15040.367 1.153 245.297 13986.267 191

2017 4 15197.000 1.203 247.301 14065.933 192

2018 1 15298.500 1.447 249.442 14219.833 193

2018 2 15446.767 1.737 250.468 14307.033 194

That file contains quarterly time series data from the first quarter of 1970 to the second quarter of 2018. The variables available are:

MZM = Money Supply (Dependent Variable)

FFUNDS = Federal Funds Rate

CPI = Consumer Price Index

YD = Disposable Income

TREND = Trend or Observation Number

Answer Each question

1.With MZM as the dependent variable, conduct the multiple regression and comment on your results (include all other variables listed above as explanatory variables). Using this, identify all variables that appear not to be significant at the 0.05 level and conduct a test on the joint significance of all the slopes (F test on multiple slopes). Comment on your results.

2.Using the full model (includes all explanatory variables), check to see if there are nonlinearities that exist between MZM and FFUNDS, CPI, and YD. For simplicity, you only need to consider the square, the reciprocal, and the natural logs of FFUNDS, CPI, and YD in your analysis. Provide your final model.

3.Suppose we believe the full model (include all variables) changes when we have a Democratic President. These years are:

Carter:January 1977 - December 1980

Clinton:January 1993 - December 2000

Obama:January 2009 - December 2016

Use a dummy variable to test to see whether this belief is correct. Test at the 0.05 level.

4.There is a belief that the relation between money supply and all other variables changed after the first quarter of 2008. Using the full model (include all variables), use a Chow test to confirm or refute this belief. Test at the 0.05 level.