Economics Calculations | EssayIvy.com

Surname 1

Student’s Name

Professor’s Name

Course

Date

Calculations

Question a

= 0.95 and n=11

∑

(𝑦 − 𝑦 𝑏𝑎𝑟)

𝑖

= SST= 100

The value of the SST can be obtained from the formula; R

= 1 – SSE/SST which implies that

SSE = (1-R

) SST= (1-.95)100= 5

Therefore, the value of 𝑆

𝑒

can be computed as 𝑆

𝑒

=SSE/ (n-2) = 5/ (11-2) = 5/9 = 0.556

Question b

If r

= 1, the implication is that SST = SSR which means that the variance in the values of Y is

fully explained by the linear regression.

Question c

If r

= 1 the relationship is either a perfect negative correlation or a perfect positive correlation.

Generally, a perfect linear correlation exist between

and Y.

Question d

When the coefficient of determination (r

) is 0, it means that there is no linear correlation

between

and Y.

Question e

t-value is given by T

9, 2(.05)

= 0.3729, This is obtained from t-table.

Where the degree of freedom = 9.

Surname 2

Question f

From the calculation, the t-value at 5% significance level is 0.3729 which indicates that 37.29 %

of the variance in the values of Y is explained by the regression model. Reject null hypothesis.

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