Statstics and Economatrics

Question 1 (10 points): Here is a sample of fictitious countries in a fictitious year. Economists have long argued that reductions in the share of the total labor force employed in agriculture are associated with increases in per capita incomes. Simultaneously, more educated workforces (measured in years of schooling) lead to higher incomes. However, more educated workforces are less likely to be involved in agriculture.

How would you write the regression prediction (i.e. how would you predict the values of real per capita given the variations in employment share in agriculture and average years of schooling?) (5 points)? Are the two independent variables statistically significant from zero at the 5% level (half the points if you show me why by setting up and performing the hypothesis test that their effects on real per capita income are different from zero).

Question 2 (10 points): The table below provides you with a sample of variables. There is an independent variable (X), a dependent variable (Y) and the predicted value of that dependent variable (. From this table, with the exception of the estimators themselves, extract two valuable pieces of information that relate to hypothesis testing and three that relates to the goodness of fit, provide them (2 points each)

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