Because the coefficient of determination R2 always increases when a new independent variable is added to the
Question:
y = β0 + β1x1 + β2x2 + ... + β17x17 + β18x18 + ε
where y = GDP and x1, x2, ... , x18 is are the economic indicators. Only 20 years of data (n = 20) are used to fit the model, and you obtain R2 = .95. Test to see whether this impressive-looking R2 is large enough for you to infer that the model is useful -that is, that at least one term in the model is important for predicting GDP. Use α = .05.
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Related Book For
Statistics For Business And Economics
ISBN: 9780321826237
12th Edition
Authors: James T. McClave, P. George Benson, Terry T Sincich
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