Question

4.Consider the following five observations on Savings and Income for a given population. (25 points) Y i 0.0 0.9 0.4 12.4 6.4 7.0 7.0 0.3 a) Assuming that Y_i are observations (in thousands of dollars) on savings, and X_i observations on income (also in thousands of dollars), compute by hand and showing all the steps you need to calculate, the regression coefficients β0, and β1 in the regression b) Write an equation for the fitted regression line considering the regression coefficients you found. c) What is the marginal propensity to save in this model? What happens to saving if income increases by S3500 dollars?

Answer 1

2 1. 9 0 3.61 09 12-4 11.16 153.7 04 6.42.56 40.96 1-2 7-0 5 4 9 2.1 4 9 5(24.22)- (34-7)(23) 5 (296.33)(34.7)2 121.1-97.16 14呂1.65-1204.09 0.0862) 34' 5 5 0.36-0. 5982 B -0 0382

L) titul turu Canke.given 1ヴ Y0 8 382 0.0862 X 스.. : (0.0362).Axr) Siro inermu inow and 1서 후 3500 dollars mean So △Y, (0 . 0 86 2 ) x (3.5) $ 301.7 午301-7