22. (Regression analysis) Economists have long believed that the greater the amount of money printed, the higher the long-term interest rates. Evidence for this view can be found in the table below, which gives long-term govern ment bond rates for 31 countries and the corresponding growth rate of money supply for each country.'' a. Plot the data, and use a regression to find the relation between the money growth and the long-term bond interest rate. b. If a country has zero money growth, what is its predicted long-term bond interest rate? c. The monetary authorities in your country are considering increasing the money growth rate by 1% from its current level. Predict by how much this will increase the long-term bond interest rate. d. Do you find the evidence in the table convincing? (Discuss briefly the R of the regression.) C E F G MONEY GROWTH AND BOND INTEREST RATES Average Average long-term Average Average long-term 39 Country money growth bond Interest rate Country money growth bond interest rate 40 US 5.65% 7.40% New Zealand 10.29% 8.81% 41 Austria 6.82% 7.80% South Africa 14.14% 11.11% 42 Belgium 5.20% 8.22% Honduras 16.20% 15.57% 43 Denmark 9.43% 10.36% Jamaica 19.88% 15.35% 44 France 8.15% 8.49% Netherlands Antilles 4.36% 9.40% 45 Germany 8.00% 7.20% Trinidad & Tobago 46 Italy 12.14% 9.10% 12.07% 10.66% Korea 47 Netherlands 15.12% 16.53% 7.89% 7.31% 48 Norway Nepal 10.64% 15.55% 8.59% 8.00% 49 Switzerland Pakistan 5.53% 12.79% 7.88% 4.54% 50 Canada Thailand 8.99% 10.86% 10.62% 8.52% 51 Japan Malawi 9.07% 20.80% 17.62% 52 Ireland 6.16% 9.43% Zimbabwe 13.49% 12.01% 53 Portugal 10.38% 12.91% Solomon Islands 10.79% 15.89% 54 Spain 12.12% Western Samoa 55 Australia 10.38% 12.72% 12.90% 13.17% 9.15% Venezuela 8.95% 28.47% 28.92%