A researcher interested in explaining the level of foreign reserves for the country of Barbados estimated the following multiple regression model using yearly data spanning the period 2001 to 2016:...

A researcher interested in explaining the level of foreign reserves for the country of Barbados estimated the following multiple regression model using yearly data spanning the period 2001 to 2016:

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Where FR = yearly foreign reserves ($000’s), OIL = annual oil prices, EXP = yearly total exports ($000’s) and FDI = annual foreign direct investment ($000’s).

Predictor                  Coef                StDev               t-ratio              p-value

Constant                5491.38            2508.81             2.1888             0.0491

      OIL                    85.39               18.46               4.626              0.0006

      EXP                 -377.08             112.19                  *                  0.0057

      FDI                  -396.99             160.66              -2.471                 **

S          =2.45               R-sq     =   96.3%         R-sq (adj)  =   95.3%

Analysis of Variance

Source           DF                    SS                               MS                    F          P

Regression      3                 1991.31                         663.77                  ?         ??

Error              12                   77.4                             6.45

Total              15

1. e) Perform the F Test making sure to state the null and alternative hypothesis.


2. f) Given an interpretation of the term “R-sq” and comment on its value.