Question

1. In the following equation, gdp refers to gross domestic product, and FDI refers to foreign direct investment as a percent of GDP. Standard errors are in parentheses below the coefficients.

log(gdp) = 2.85 + 0.547log(bankcredit) + 0.296FDI

                  (0.13)    (0.022) (0.017)

2. Holding the level of FDI constant, if bank credit increases by 1%, gdp increases by ___________.
3. Holding the level of bank credit constant, if FDI increases by 1 percentage point, gdp increases by ____________.
4. Construct a 95% confidence interval & a 99% confidence interval around each coefficient. Which is larger & why?
5. SSR = 564.08, SST = 769.07, n = 80. Calculate the model F statistic & adjusted R².

Answer 1