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:

??=?+????+????+????

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). The sample of data was processed using MINITAB and the following is an extract of the output obtained:

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

a)Hence test whether ? is significant. Give reasons for your answer.

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

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