Below is an estimated cross-country regression of a Cobb-Douglas production function based upon the manufacturing sector of 60 countries in 2009 where *t*-ratios are given in brackets:

where *Y *denotes the natural logarithm of value added output in thousands of dollars, *X*_{1 }is the natural logarithm of labour input in thousands of worker hours and *X*_{2 }is the natural logarithm of capital expenditure in thousands of dollars.

a. Interpret the coefficients.

b. The following auxiliary regression is used to conduct White's test for heteroskedasticity given the diversity of countries used in the cross-sectional regression:

where *u*_{i }denotes the residuals of the estimated Cobb-Douglas production function. Using this information, apply White's LM test for heteroskedasticity at the 5% and the 10% significance level. Be careful to clearly specify the hypotheses of the test and explain how you draw your inference.

### Recently Asked Questions

- Annual Demand = 200,000 The order cost = $100 Annual holding rate = 25% Price varies depending on the order quantity per the following schedule: Orders

- I need a time line analysis of 1812 overture by Tchaikovsky

- Use the binomial tables and/or the normal tables to solve A National Center for Health Statistics report based on 1985 data states that 30 percent of