Question

Consider the accompanying data on x = research and development expenditure (thousands of dollars) and y = growth rate (% per year) for eight different industries.

x	2025	5039	906	3572	1157	327	378	191
y	1.90	3.96	2.44	0.88	0.37	−0.90	0.49	1.01

(a) Would a simple linear regression model provide useful information for predicting growth rate from research and development expenditure? Use a 0.05 level of significance.

Calculate the test statistic. (Round your answer to two decimal places.)

t =

What is the P-value for this test? (Use a statistical computer package to calculate the P-value. Round your answer to three decimal places.)

P-value =

(b)

Use a 90% confidence interval to estimate the average change in growth rate associated with a $1000 increase in expenditure. (Round your answer to six decimal places.)

(_____,______) % per yr

Answer 1