A Professor of Economics Wants to Study the Relationship Between

Essay

A professor of economics wants to study the relationship between income (y in $1000s) and education (x in years). A random sample eight individuals is taken and the results are shown below. Determine the standard error of estimate.
s_r = ______________
Describe what this statistic tells you about the regression line.
____________________________
Determine the coefficient of determination.
R² = ______________
Discuss what its value tells you about the two variables.
________________________________________________________
Calculate the Pearson correlation coefficient.
r = ______________
Why does it have the sign it has?
________________________________________________________
Conduct a test of the population slope to determine at the 5% significance level whether a linear relationship exists between years of education and income.
Test statistic:
t = ______________
Rejection Region:
Reject H₀ if | t | > ______________
Conclusion:
______________
A linear relationship ______________ between years of education and income.