The size of the residuals can give us an idea of how well our model is performing. Smaller residuals mean that our model's predictions are closer to the actual values, which is good. Larger residuals mean that our model's predictions are further from the actual values, which is not as good. In this case, the residuals are relatively small, suggesting that our model is doing a decent job of predicting the number of bankruptcies based on the number of firm births. However, there is still some error in the predictions, as indicated by the non-zero residuals