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International Exchange Rates 1: An economist is interested in factors that influence exchange rates among second and third world countries to the U.S dollar (USD).
International Exchange Rates 1: An economist is interested in factors that influence exchange rates among second and third world countries to the U.S dollar (USD). Data were collected on a number of countries last year including exchange rate in monetary units (m.u.) to USD (Exch Rate)*, inflation CPI (as a percent), and an index of GDP. These data are in the worksheet entitled THIRDWORLD. (* For example, The Czech Republic's monetary unit is the Czech Koruna. At the beginning of December 2019, the exchange rate of Czech Koruna to USD was 23.09, meaning that it takes 23.09 Czech Koruna to "buy" 1 USD.) Begin by fitting the linear model to predict the exchange rate from inflation CPI (x1) and the index of GDP (x2). a) State the linear model equation
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