Given below are data on the number of business establishments (millions) and the self-employment rate (%) released by the Small Business Administration, Office of Advocacy, for a 21-year period of U.S. business activity. Develop a regression model to predict the selfemployment rate by the number of business establishments.

Number of Self-

Establishments Employment Rate

(millions) (%)

4.54317 ..........8.1

4.58651 ..........8.0

4.63396 ..........8.1

5.30679 ..........8.2

5.51772 ..........8.2

5.70149 ..........8.0

5.80697 ..........7.9

5.93706 ..........8.0

6.01637 ..........8.2

6.10692 ..........8.1

6.17556 ..........8.0

6.20086 ..........8.1

6.31930 ..........7.8

6.40123 ..........8.0

6.50907 ..........8.1

6.61272 ..........7.9

6.73848 ..........7.8

6.89487 ..........7.7

6.94182 ..........7.5

7.00844 ..........7.2

7.07005 ..........6.9

Use this model to predict the self-employment rate for a year in which there are 7.0 (million) business establishments. Discuss the strength of the regression model. Use these data and the regression model to compute a Durbin-Watson test to determine whether significant autocorrelation is present. Let alpha be .05.