(Step-by-Step) The data below represent defense expenditure and total government expenditure for a sample of 7 countries. Defense Exp, x Total Exp, y 40 100 50
Question:
The data below represent defense expenditure and total government expenditure for a sample of 7 countries.
| Defense Exp, x | Total Exp, y |
| 40 | 100 |
| 50 | 200 |
| 50 | 300 |
| 70 | 400 |
| 65 | 500 |
| 65 | 600 |
| 80 | 700 |
-
Calculate the regression equation for Total expenditure (Y) as
a function of Defense expenditure (X). - Explain what the coefficients in the equation (i.e. \(a\) and \(b\) ) mean in terms of the variables.
- Calculate r and r—squared and explain what each means.
- You have total expenditure for two more countries. Estimate the defense expenditure for a country with a total expenditure of 350 and for a country with a total expenditure of 1,000 using the regression equation you found in part A.
- Which of the estimates in part D do you feel more confident in and why?
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