(a) Demand for M1

Trace Test

Hypothesis

Eigenvalue

Trace Statistic

5% Critical Value

Prob.

None

0.290

35.728

29.797

0.009

At Most 1

0.125

9.997

15.495

0.281

Maximum Eigenvalue Test

Hypothesis

Eigenvalue

Max-Eiegen Statistic

5% Critical Value

Prob.

None

0.290

25.731

21.131

0.011

At Most 1

0.125

9.977

14.625

0.551

(b) Demand for M2

Trace Test

Hypothesis

Eigenvalue

Trace Statistic

5% Critical Value

Prob.

None

0.127

17.244

29.797

0.622

At Most 1

0.091

7.229

15.495

0.551

Maximum Eigenvalue Test

Hypothesis

Eigenvalue

Max-Eigen Statistic

5% Critical Value

Prob.

None

0.127

10.016

21.132

0.743

At Most 1

0.091

7.096

14.265

0.778

(c) Demand for M3

Trace Test

Hypothesis

Eigenvalue

Trace Statistic

5% Critical Value

Prob.

None

0.132

17.047

29.797

0.637

At Most 1

0.083

6.562

15.495

0.629

Maximum Eigenvalue Test

Hypothesis

Eigenvalue

Max-Eigen Statistic

5% Critical Value

Prob.

None

0.132

10.485

21.132

0.698

At Most 1

0.083

6.433

14.265

0.558