Is economic growth in Europe related to growth in the United States? Here€™s a scatterplot of the average growth in 25 European countries (in % of Gross Domestic Product) vs. the growth in the United States. Each point represents one of the years from 1970 to 2011.

Dependent variable: European Countries GDP Growth
R2 =44.92%
s =1.352
Variable .......... Coefficient
Intercept ......... 0.693333
U.S. GDP Growth ..... 0.534
a) Check the assumptions and conditions for the linear model.
b) Explain the meaning of R2 in this context.

Transcribed Image Text:

8-2 L4 -6 -2 Annual GDP Growth Rates-United States (%)