# Question: Based on 25 years of annual data an attempt was

Based on 25 years of annual data, an attempt was made to explain savings in India. The model fitted was as follows:

y = β0 + β1x1 + β2x2 + ε

where

y = change in real deposit rate

x1 = change in real per capita income

x2 = change in real interest rate

The least squares parameter estimates (with standard errors in parentheses) were (Ghatak and Deadman 1989) as follows:

b1 = 0.097410.02152 b2 = 0.37410.2092

The adjusted coefficient of determination was as follows:

R-bar2 = .91

a. Find and interpret a 99% confidence interval for β1.

b. Test, against the alternative that it is positive, the null hypothesis that β2 is 0.

c. Find the coefficient of determination.

d. Test the null hypothesis that β1 = β2 = 0.

e. Find and interpret the coefficient of multiple correlation.

y = β0 + β1x1 + β2x2 + ε

where

y = change in real deposit rate

x1 = change in real per capita income

x2 = change in real interest rate

The least squares parameter estimates (with standard errors in parentheses) were (Ghatak and Deadman 1989) as follows:

b1 = 0.097410.02152 b2 = 0.37410.2092

The adjusted coefficient of determination was as follows:

R-bar2 = .91

a. Find and interpret a 99% confidence interval for β1.

b. Test, against the alternative that it is positive, the null hypothesis that β2 is 0.

c. Find the coefficient of determination.

d. Test the null hypothesis that β1 = β2 = 0.

e. Find and interpret the coefficient of multiple correlation.

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