Question

In a regression of average of wages (W,$)
on the number
of employees (N) for a random sample of 30 firms
the following regression results were obtained
W = 7.5+ 0.00 N
t = na (1610)
R^2=0.90...............(i)
W/N= 0.008 + 78(1/N )
t = (14.43 (76.58)
R² = 0.99.................(ii)
a) How do you interpret the two regression?
b) what is the author assuming in going from
equation (i) to (ii) was he worried about
heteroscedasticity? How do you know?​

Answer 1

Answer:

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