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b. Yes, it is statistically significant at even a 1% error level. It only adds to our understanding slightly. It tells us that Microsoft’s real revenues have been falling over time when MARKETING and the quarter dummy variables are accounted for. It would really add to our understanding if we could figure out why this is happening, so the T variable doesn’t really tell us that much.
c. Using a 5% error level, dU=1.77, dL=1.34. The Durbin-Watson statistic from our results, 0.68, is below dL=1.34. The null hypothesis of no autocorrelation is rejected at a 5% error level; there is evidence of autocorrelation. This is the same result that we got originally (Table 7.B) when we did not include T in the model.
Questions #13 and 14 on Page 181