European GDP growth. 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 years from 1970 to 2007.

Dependent variable: 25 European Countries GDP Growth R2 = 29.65%
s = 1.156 Variable Coefficient Intercept 1.330 U.S. GDP Growth 0.3616

a) Check the assumptions and conditions for the linear model.

b) Explain the meaning of in this context.

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Annual GDP Growth of 25 European Countries (%) 2 5 -2 0 2 6 Annual GDP Growth of United States (%)