Question

1. The annual sales of American made vehicles (in 1000 vehicles) to foreign countries has been estimated as follow:

                                                E(Y_i) =   200.5   -   4.5X₁ +   1.8X_2i - 3.76X₃        R² = 0.73

(1.081)^*     (-2.73)^*    (3.932)^*  (-5.03)^*        n = 44, F = 18.56     

Where E(Y_i) = annual average number of vehicles sold to foreign countries (in 1000 vehicles), X₁ = the annual average price of all vehicles sold to foreign countries (in $100), X₂ = average foreign per capita income (in $1000), and X₃ is a binary variable that assumes a value of 0 when there is no major political turmoil in foreign countries in a year, and a value of 1 when there is a major turmoil in foreign countries in a year.

* Numbers inside parentheses are t-statistics.

a. Explain the meaning of each estimated coefficient (except the intercept) in the context of this problem and plain English.

b. Use alpha of 0.05 to determine which estimated coefficients are significant (different from zero) including the intercept. Make sure all H₀s and H_as are explained in the context of this model and plain English. Also, find the approximate P-values. What are your conclusions?

  

c. Check the overall significance (or validity) of the entire model using α = 0.05. Make sure H_o, H_a, and your conclusions are explained in plain English. What is the approximate p-value?

d. Explain the meaning of multiple coefficient of determination in the context of this model.

Answer 1

ANSWER :