A consumption function is estimated by OLS using annual data from 1950 to 1986 and the estimates obtained (with OLS standard errors reported in parentheses) are:
Dct = –0.205  +  0.809Dyt  – 0.457 ct-1 + 0.263yt-1 +  Ut                 
                     (0.121)    (0.128)        (0.129)            (0.126)        

where c is the log of real consumption, y is the log of real GDP, and D is the first difference operator. The following statistics and diagnostics are also computed for this regression model: Adjusted-R2 = 0.517; Breusch-Godfrey Test ~ X2（chi-square)= 1.31; Bera-Jarque Test ~ x2 = 9.88.

(a)         Evaluate the regression model on the basis of the diagnostic tests reported. What do you conclude?  Suggest remedial action if any problems are detected.                                                               

(b)        Interpret precisely the estimated coefficient corresponding to Dyt in the above regression model.                                                        

(c)        Provide a precise interpretation for the estimated coefficient corresponding to the ct-1 variable in the above regression model.