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Question 1 A statistician was interested in studying the determinants of the salaries of Chief Executive Officers (CEO) of companies. Data was collected from a sample of 209 firms. The model, the list of variables and the basic output are shown below. log(salary) = β₀ + β₁*log(sales) + β₂*roe + β₃*finance + ε List of variables: salary: the annual salary of the CEO in small dollars sales: the annual sales of the company in small dollars roe: return on equity finance: a dummy variable that equals one if the company is in the financial industry and zero for other sectors industrial: a dummy variable that equals one if the company is in industrial firm and zero for other firms Model output: [Table of regression output showing coefficients, standard errors, t-values, and p-values for the intercept, log(sales), roe, and finance variables] [Additional statistical output including R-squared, adjusted R-squared, F-statistic, and residual standard error] [Breusch-Pagan test results] [Variance Inflation Factors (VIF) results] [Cameron Trivedi's decomposition of IM-test results] Which statements are correct? (You may tick more than one of the tickboxes below, provided they are correct) □ At the significance level of 1%, the intercept is significant but the model suffers from heteroskedasticity □ At the significance level of 5%, the finance variable and intercept are the only statistically significant variables □ At the significance level of 1%, the White's test indicates that the model suffers from heteroskedasticity □ The White test shows there is heteroskedasticity at the significance level of 5%
Case Problem Analysis: Business and the Bill of Rights Evander worked in the nonmilitary operations of a large firm that produced both military and nonmilitary goods. When the company discontinued the production of nonmilitary goods, Evander was transferred to the plant producing military equipment. Evander left his job, claiming that it violated his religious principles to participate in the manufacture of goods to be used in destroying life. in effect, he argued, the transfer to the military equipment plant forced him to quit his job. He applied for unemployment compensation with the state but was denied because he had not been effectively "discharged" by the employer, but had voluntarily terminated his employment making him ineligible for that state benefit. Identifying the Facts and Issues Freedom of religion is divided into two major categories. The first prevents the government from promoting or preferring religion. The second component of religious freedom guarantees that people can believe what they want to believe and is called the clause. The free exercise clause has an absolute protection related to but the government may restrict an individual's in order to maintain order. In order to financially support himself, Evander either had to working for the military division or needed to unemployment benefits. In order to receive unemployment benefits, Evander could not , but instead had to . Evander's company did not him, instead, it allowed him an opportunity to continue working but for the military division.