In Exercise, a statistics practitioner examined the relationship between office rents and the city’s office vacancy rate. The model appears to be quite poor. It was decided to add another variable that measures the state of the economy. The city’s unemployment rate was chosen for this purpose.

a. Determine the regression equation.

b. Determine the coefficient of determination and describe what this value means.

c. Test the model’s validity in explaining office rent.

d. Determine which of the two independent variables is linearly related to rents.

e. Determine whether the error is normally distributed with a constant variance.

f. Determine whether there is evidence of autocorrelation.

g. Predict with 95% confidence the office rent in a city whose vacancy rate is 10% and whose unemployment rate is 7%.