13.74 Unemployment and GDP Refer to Exercise 13.67.

When unemployment rate of a country is added as an additional predictor to the model already containing CO2 and percentage of population not using the Internet, we get the following output.

a. Interpret the sign of the coefficient for unemployment.
Is this the direction of the effect you would expect?

b. Is the coefficient for unemployment significantly different from zero? Explain. Does this automatically mean unemployment is unrelated to GDP? (Hint:
Does the effect of employment depend on other variables in the model?)

c. What measure would you use to investigate whether unemployment helps in predicting GDP?

d. R2 increases from 94.26% to 94.28% when adding unemployment to the model with CO2 and NoInternet.
Explain what this means.

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Coefficients: Estimate Std. Error t Pr (t) (Intercept) 38923 7259 5.4 0.0007 CO 813 282 2.9 0.0204 NoInternet -395 58 -6.9 0.0001 Unemployed 107 606 0.2 0.8645