The director of a federal bureau is trying to anticipate his budget for next year so that he can begin to plan and allocate resources. He has obtained data for this year and last year on the amount of funds budgeted to each federal agency. He regresses this year’s appropriation in dollars (Y) on last year’s appropriation in dollars (X) for the agencies and finds the following:
Ŷ= 146,384 + 1.11X
r2 = .81 Sy|x = 123,502 sb = .44 n = 128
Analyze these results for the bureau director. How strongly are these variables related? If the budget for the bureau this year is $3,280,321, what can he expect the budget to be next year?