Essay
Your textbook estimates the initial relationship between the percentage change of real frozen OJ and the freezing degree days as follows: 
t = -0.40 + 0.47 FDDt
(0.22)(0.13)
t = 1950:1 - 2000:12,R2 = 0.09,SER = 4.8
a.Calculate the t-statistic for the slope coefficient.Can you reject the null hypothesis that the coefficient is zero in the population?
b.The above regression was estimated using HAC standard errors.When you re-estimate the regression using homoskedasticity-only standard errors,the standard error of the slope coefficient drops to 0.06.Calculate the t-statistic for the slope coefficient again.Which of the two standard errors should you use for statistical inference?
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a.The t-statistic is 3.62.Hence you can ...View Answer
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