A study used historical data to model the GDP per capita of 24 countries. One an

Question

A study used historical data to model the GDP per capita of 24 countries. One analysis estimated the effect on GDP of economic regulations, using an index of the degree of economic regulation and other variables They found the regression model in the accompanying table. All t-statistics on the individual coefficients have P-values 0.05, except the coefficient of Primary Education. Complete parts a) and b) below. iClick the icon to view the multiple regression model for GDP/Capita. a) The researchers hoped to show that more regulation leads to lower GDP/Capita. Does the coefficient of the Economic Regulation Index demonstrate that? Explain O A. Yes, it says that after allowing for the effects of all the other predictors in the model, the effect of more regulation on GDP is positive. O B. Yes, it says that the effect of more regulation on GDP is negative, regardless of the other predictors in the model C. No, it says that after allowing for the effects of all the other predictors in he model the efect of more regulation on 0 s negat ve O D. No, it says that the effect of more regulation on GDP is postive, regardless of the other predictors in the model. b) The F-statistic for this model is 131.74 (5, 17 df). What do you conclude about the model? O A. The F-statistic would yield a p-value that is significant. It can be said with confidence that more regulation leads to lower GDP/Capita OB. The F-statistic would yield a p-value that is not significant. It cannot be said with confidence that more regulation leads to lower GDPICapita. C The F statistic would yield a p-value that is not significant. It cannot be said with confidence that the regression coefficients arent all zero O D. The F-statistic would yield a p-value that is significant. It can be said with confidence that the regression coefficients aren't all zero.

Explanation / Answer

Question (a)

Here the coefficient of economic regulation index is (-1345) so that means more regulation lead to less GDP/capita.

Option B is correct. The the effect of more regulation on GDP is negative.

Question (b) F -statistic = 131.74

Fcritical for alpha= 0.05 is 2.81

This F- statistic will yield a result which is significant in nature. So, that applies for the general regression which mean that it can be said be confidence that the regression coefficients are not all zero. Option D is correct.

Question (c) GDP/capita is removed from the predictor. then F - stats drops to 0.736.and none of the test statistics is significant. Here Option c is correct as the interpretation is valid in part(a) because that variable was significant in that model. But here by removed GDP/capita(10 years ago) other variables don't significantly contribute to the model.

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