1. Wikipedia is the somewhat controversial on-line free encyclopedia that anyone can edit. Some of the controversy surrounds the fact that Wikipedia's content is written collaboratively by volunteers around the world and the material is frequently edited by others.  Some consider this feature a strength of Wikipedia while others consider it a weakness.

The purpose of this question is to have you assess the "correctness" and completeness of the information in Wikipedia concerning statistical/econometric topics. In particular,

-  First answer question 3.1 (onlyb, c, d, f, g, l, and m) in your textbook (p. 86), using information from class and from your textbook. 

-  Then use Wikipedia to provide supporting evidence for your answers for four of these (select any 4).  Do you find incorrect information in Wikipedia that needs to be changed, based on what you have learned in the textbook and in class?  For each of the 4 that you selected, discuss briefly in writing what you have found in Wikipedia, appropriately citing where you found the material so that the TA could find it if he needed to.  You can copy parts from Wikipedia and turn them in with your assignment, but are NOT required to do so!

Question 1

                Explain the meaning of:

                                b. OLS estimators

                                c. The variance of an estimator

                                d. Standard error of an estimator

                                f. Heteroscedasticity

                                g. Autocorrelation

                                l. Standard error of estimate

                                m. BLUE (Best linear unbiased estimators)

2. Work textbook Problem 3.12 (p. 89- 90).  The data are in Table 3-5 on the textbook's website (and linked from the course syllabus/outline on Angel).

Question 3

 To study the relationship between capacity utilization in manufacturing and inflation in the United States, we obtained the data shown bellow. In this table, Y= inflation rate as measured by the % change in GDP implicit price deflator and X= capacity utilization rate in manufacturing as measured by output as a percent of capacity for years 1960 - 2007.

a. A priori, what would you expect to be the relationship between inflation rate and capacity utilization rate? What is the economic rationale behind your expectation ?

b. Regress Y and X and present your result in the format of : se= (estimated regression coefficients from standard errors), t= (estimated t values), p value= (of computed t values)

c. Is the estimated slope coefficient statistically significant?

d. Is it statistically different from unity?

e. The natural rate of capacity utilization is defined as the rate at which Y is zero. What is this rate for the period under the study?