Extracted text: 1. Consider the following four demand functions for money: (1) InM," = a, +a,InY," + a, In R, + a, In P, + u, (2) InM," = ß, + B,lnY, + ß, In R, + ß;, In P, + u,2 where M,", Y,", R, and P, denote, respectively, aggregate nominal money demand, aggregate national income, long-term interest rate, implicit price deflator. These two money demand equations are estimated for the period 1949-1965 and the following estimated equations are obtained: (1) InM," = 3.999 +1.710lnY," – 0.608 In R, – 0.759 In P, R² = 0.942, SSR = 0.080 (0.469) (1.801) (0.416) (2) InM," = 3.999 +1.710lnY, – 0.608 ln R, +0.9519 ln P, (0.651) R² = 0.942, SSR = 0.080 (1.801) (0.416) (0.469) (0.651) (b) In Model (2) test the hypothesis that the price level has no significant effect on real money demand using t and F statistics. Windov Windowr