The Worldwide Cost of Living Survey published by Numbeo.com provides an index that expresses the cost of living in other cities as a percentage of the New York cost. For example, in 2017, the cost of living index in Geneva was 142, which means that it was 42% higher than New York. The data also contain separate indices for Groceries, Rent, and Restaurants. The output shows the regression of Total Cost of Living Index on Grocery Index.

a) State the hypotheses about the slope (both numerically and in words).

b) Perform the hypothesis test and state your conclusion in context.

c) Explain what the R-squared in this regression means.

d) Do these results indicate that the cost of groceries is the main determinant of the cost of living in a city? Explain.

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Predictor Estimate Std Error t- Ratio P- Value Intercept 9.79 0.85 11.6 <.0001 Groceries Index 0.87 0.01 70.1 <.0001 s = 6.86 R-Sq = 91%