In trying to determine the relationship between consumer sentiment on annualized GDP growth, you collect data for 40 quarters, and regress GDP growth as the dependent variable on consumer sentiment as independent variable. The data statistics and regression results are as follows: GDP growth Sentiment 97 Mean 2.6 St.Dev. 2.9 Regression results: R-squared Standard error 0.51 0.56 Intercept 2.34 Intercept std. error 1.6 0.29 0.11 Slope Slope std. error What is the variance of the prediction error if you try to predict GDP growth when consumer sentiment 95, using the results of this regression? (Bonus thinking question: Is your prediction statistically different from zero at a 5% level of significance?)

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
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Author:Carter
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Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
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In trying to determine the relationship between consumer sentiment on annualized
GDP growth, you collect data for 40 quarters, and regress GDP growth as the
dependent variable on consumer sentiment as independent variable. The data
statistics and regression results are as follows:
GDP growth Sentiment
Mean 2.6
St.Dev. 2.9
97
9
Regression results:
R-squared
0.51
Standard error 0.56
Intercept
2.34
Intercept std. error 1.6
0.29
0.11
Slope
Slope std. error
What is the variance of the prediction error if you try to predict GDP growth when
consumer sentiment 95, using the results of this regression?
(Bonus thinking question: Is your prediction statistically different from zero at a 5%
level of significance?)
Transcribed Image Text:In trying to determine the relationship between consumer sentiment on annualized GDP growth, you collect data for 40 quarters, and regress GDP growth as the dependent variable on consumer sentiment as independent variable. The data statistics and regression results are as follows: GDP growth Sentiment Mean 2.6 St.Dev. 2.9 97 9 Regression results: R-squared 0.51 Standard error 0.56 Intercept 2.34 Intercept std. error 1.6 0.29 0.11 Slope Slope std. error What is the variance of the prediction error if you try to predict GDP growth when consumer sentiment 95, using the results of this regression? (Bonus thinking question: Is your prediction statistically different from zero at a 5% level of significance?)
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