The following data refers to the demand for money (M) and the rate of interest (R) in for eight different economics: M (In billions) 56 50 46 30 20 35 37 61 R% 6.3 4.6 5.1 7.3 8.9 5.3 6.7 3.5 a. Assuming a relationship i M   R U , obtain the OLS estimators of  and  b. Calculate the coefficient of determination for the data and interpret its value c. Test the hypothesis that interest rate influences demand for money d. Compute the standard error of the regression coefficients and conduct test of significance at the 5% level of significance. e. If in a 9th economy the rate of interest is R=8.1, predict the demand for money(M) in this economy.

The following data refers to the demand for money (M) and the rate of
interest (R)

in for eight different economics:

M (In billions) 56 50 46 30 20 35 37 61

R% 6.3 4.6 5.1 7.3 8.9 5.3 6.7 3.5

a. Assuming a relationship i M   R U , obtain the OLS
estimators of

 and 

b. Calculate the coefficient of determination for the data and
interpret its value

c. Test the hypothesis that interest rate influences demand for money

d. Compute the standard error of the regression coefficients and
conduct test of

significance at the 5% level of significance.

e. If in a 9th economy the rate of interest is R=8.1, predict the
demand for money(M)

in this economy.