Chapter Eight Homework Problem Set The data required to complete the problems is attached

Chapter Eight Homework Problem Set
The data required to complete the problems is attached.  Make sure that you 
1) generate new variables that are natural logs of old variables (refer to our function form notes for the log-log
model (also known as the log-linear model or double log model)  
2) examine results for multicollinearity.
Please complete the following problems at the end of chapter 8.
8.14 You are given the annual data in Table 8-5 for the United States for the period 1971 to 1986. Consider the
following aggregate demand function for passenger cars:
Where In = the natural log
a. What I the rational for the introduction of both price indexes X? and X??
b. What might be the rationale for the introduction of the “employed civilian labor force” (X?) in the
demand function?
c. How would you interpret the various partial slope coefficients?
d. Obtain OLS estimates of the preceding model.

8.15 Continue with Problem 8.14. Is there multicollinearity in the previous problem? How do you know?