Personal Debt According to the World Almanac and Book of Facts

Essay

Personal debt According to The World Almanac and Book of Facts 2004, the debt per capita for the years 1990-2001 gives the following scatterplot:


Regression output gives the equation of the regression line as $\hat{\text{ Debt }}$$=-2,231,226+1128$ (Year) with $R^{2}=98.8 \%$ .

a. What is the response variable?
b. What is the correlation coefficient r?
c. Explain in context what the slope of the line means.
d. Explain in context what $R^{2}=98.8 \%$ means.
e. You decide to take a look at a residuals plot before making any predictions. Based on the following residuals plot, does linear regression seem appropriate for these data? Explain.