Question: The Department of Labor's division of workers' compensation programs believes that it is unfair to charge that rising medical costs for workers' compensation programs are the result of program expansion. The department believes that costs rise because medical costs in general rise. Using the total amount of money spent for workers' compensation medical benefits in millions of dollars (Y), the department runs a regression using the consumer price index for medical care as the independent variable (CPIMED = 100 in 1967). This produces the following regression:

^

Y = -927.60 + 17.71X

s 2

b = .22 Sylx = 106.2 N = 45 r = .9949

Interpret this regression. Present a hypothesis and a null hypothesis, and evaluate the hypotheses.

When you interpret the regression, you need to interpret the intercept and slope and R squared. Answer the rest of questions in the problem and state your conclusions step by step in plain language.