Based on data from 63 counties, the following model was estimated by least squares:

where
y` = growth rate in real gross domestic product
x1 = real income per capita
x2 = average tax rate, as a proportion of gross national product
The numbers in parentheses under the coefficients are the estimated coefficient standard errors.
a. Test against a two-sided alternative the null hypothesis that β1 is 0. Interpret your result.
b. Test against a two-sided alternative the null hypothesis that β2 is 0. Interpret your result.
c. Interpret the coefficient of determination.
d. Find and interpret the coefficient of multiple correlation.

Transcribed Image Text:

9 = 0.58-.052%-.005x2 R2-17 (.019) (042)