The Organization for Economic Cooperation and Development (OECD) tracks various summary statistics of the member economies. The countries lie in Europe, parts of Asia, and North America. Two variables of interest are GDP (gross domestic product per capita, a measure of the overall production in an economy per citizen) and trade balances (measured as a percentage of GDP). Exporting countries tend to have large positive trade balances. Importers have negative balances. These data are from the 2005 report of the OECD.

(a) Describe the association in the scatterplot of GDP on Trade Balance. Does the association in this plot move in the right direction? Does the association appear linear?

(b) Estimate the least squares linear equation for GDP on Trade Balance. Interpret the fitted intercept and slope. Be sure to include their units. Note if either estimate represents a large extrapolation and is consequently not reliable.

(c) Interpretandassociated with the fitted equation. Attach units to these summary statistics as appropriate.

(d) Plot the residuals from this regression. After considering this plot, does it provide an adequate summary of the residual variation?

(e) Which country has the largest values of both variables? Is it the country that you expected?

(f) Locate the United States in the scatterplot and find the residual for the United States. Interpret the value of the residual for the United States.

Nation	GDP (per cap)	Muni Waste (kg/person)	Trade Bal (%GDP)
Australia	30500		690	-2.9
Austria	35800		560	4.8
Belgium	33800		440	2.9
Canada	30700		380	3.9
Czech Republic	10500		280	-0.3
Denmark	44700		670	5.1
Finland	35600		450	5.6
France	32900		540	0.3
Germany	33200		640	4.9
Greece	18600		430	-8.6
Hungary	9900		460	-3
Iceland	41800		730	-5.9
Ireland	44700		760	15.6
Italy	28800		520	0.8
Japan	36500		410	1.6
Korea	14100		390	4.4
Mexico	6500		320	-1.6
Netherlands	35500		600	5.4
New Zealand	23700		400	0.2
Norway	54500		700	14.2
Poland	6300		260	-1.8
Portugal	16000		450	-7.7
Slovak Republic	7600		300	-2.7
Spain	24400		650	-3.6
Sweden	38500		470	8
Switzerland	47900		660	7.1
Turkey	4200		360	-5.8
United Kingdom	35500		610	-3.3
United States	39700		740	-4.5