FIN 271 DR. R. SOYERFALL 201"Assignment 4PART I: Monthly Change in Earnings Index for British WorkersIn this assignment we will be interested in modeling the monthly change in earningsindex (CEAR) for British workers over the period of January 1989 to October 2004 using aregression model. The time-series data is available in the file "UKEAR.TXT". The dataconsist of the following variables: Change in earnings index (CEAR), unemployment rate(UNEMP), inflation rate (INFL) and political party in power (PARTY). The independentvariable PARTY takes a value 1 if the Labor party is in the government during a period andthe value 0 if the Conservative party is in the government. In any statistical inference you canuse a level of significance 0.05.αœ(a) Estimate the regression model CEAR by using the other three variables asindependent variables, that is, estimate the modelCEARUNEMPINFLPARTY.>!">#>$>>œ""""%Discuss if all three variables are significant at 0.05.αœ
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