(Answered):Few Questions About Econometrics . . . .

Question Description

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= 2.613 + 0.003 sales – 0.000000007 2

The following equation was obtained by OLS:

(0.429) (0.00014) (0.0000000037) N= 32, 2=0.1484

Rdintens represent company’s R&D.

(1) At what point does the marginal effect of sales on rdintens become negative?

(2) Would you keep the quadratic term in the model? Explain.

(3) Define salesbil as sales measured in billons of dollars: salesbil = sales/1000.

Rewrite the estimated equation with salesbil and 2 as the independent variables. Be sure to report standard errors and R-squared.

There is an equation that was estimated as follows:

� =1028.10 + 19.30 hsize – 2.19 h 2 – 45.09 female –