The accompanying scatterplot shows the growth (in % of Gross Domestic Product) of the developing countries vs. the growth of developed countries for a particular region. Each point represents one of the years from 1970 to 2007. The output of a regression analysis follows the scatterplot. Complete parts a and b below.

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Click the icon to view the scatterplot and the output of the regression analysis.

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Part 1

a) Check the assumptions and conditions for the linear model. What assumptions and conditions are met?

A.

All of the assumptions and conditions are met. The variables are both quantitative (with units % of GDP), the plot is reasonably straight, there are no outliers, and the spread is roughly constant (although the spread is large).

B.

All of the assumptions and conditions are met with the exception of the condition that there are no outliers (there are a total of three outliers in the scatterplot).

C.

All of the assumptions and conditions are met with the exception of the quantitative variables condition; the data are categorical.

D.

All of the assumptions and conditions are met with the exception of the linearity condition; the points do not follow a straight line pattern (as evidenced by the

R2-value).

Part 2

b) Explain the meaning of

R2

in this context.

A.

About

19%

of the variation in the growth rates of developing countries is caused by the growth rates of developed countries.

B.

About

19%

of the variation in the growth rates of developing countries is accounted for by the growth rates of developed countries.

C.

About

19%

of the growth rates of developing countries are accounted for by the growth rates of developed countries.

D.

About

19%

of the variation in the growth rates of developed countries is caused by the growth rates of developing countries.