Posted: March 20th, 2023

# Consider the following two least-squares estimates of the relationship between interest rates and the federal budget deficit in the United States: Model 1: N = 56, R2 = 0.00 whe

economics multi-part question

I will be uploading a file that has one question and in this one question you will b solving 6 questions. Please let me know if you have any questions!
Requirements: 6 questions
Consider the following two least-squares estimates of the relationship between interest rates and the federal budget deficit in the United States:
Model 1:
N = 56, R2 = 0.00
where: = Interest rate on AAA corporate bonds
= Federal budget deficit as percentage of GNP
Model 2: .369
N = 38, R2 = 0.40
where: = Interest rate on 3 ? month Treasury bills
= Federal budget deficit in billions of dollars
= Rate of inflation (in percent)
What does least squares? estimates mean? What is being estimated? What is being squared? In what sense are the squares least??
What does it mean to have an R2 of 0.00? Is it possible for R2 to be negative? What about ?
R2 tells us what percent of variation in the dependent variable from its mean can be explained by a regression model (regression equation). How does an increase in R2 impact TSS, ESS, and RSS for a given regression equation?
What signs would you have expected for the estimated slope coefficients of the two models?
Comparing the two equations, which model has estimated signs corresponding to your prior expectations?
Can one argue that model 2 is preferred on the basis of fit?

## Get the Complete Custom Written Paper

We have writers who will write a complete custom paper for you from scratch, on the above topic

and place new orders strong>

### Place Order Now

Place the order to get a custom written paper on this topic now

### Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

## Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
\$0.00
Unlock left : 0