Attem Problem:3) According to a recent report by the government, new home construction fell to an 18-month low in Octobe

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Attem Problem 3 According To A Recent Report By The Government New Home Construction Fell To An 18 Month Low In Octobe 1 (55.67 KiB) Viewed 91 times

Attem Problem:3) According to a recent report by the government, new home construction fell to an 18-month low in October 2010. Housing starts, or the number of new homes being built, experienced an 11.7% drop in its seasonally adjusted annual rate. Urmil Singh works for a mortgage company in Madison, Wisconsin. She wants to better understand the quantitative relationship between housing starts, the mortgage rate, and the unemployment rate. She gathers seasonally adjusted monthly data on these variables from 2006:01-2010:12. The data is shown below; the complete data, are available on the Excel a. Estimate a multiple regression model for housing starts ushig the mortgage rate and the unemployment rate as the explanatory variables. b. At the 5% significance level, evaluate the joint significance of the explanatory variables. c. At the 5% significance level, evaluate the individual significance of the explanatory variables. d. Discuss the potential problems of multicollinearity, also test the possibility of this issue (apply you judgement).