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

1. What is dependent and independent variables?


2. Fully write out the regression equation


3. Fill in the missing values ‘*’, ‘**’, ‘?’and ‘??’


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


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


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