Problem 4. The following scatter diagram shows the OLS estimates of the regression line, which represents the relationsh

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Problem 4 The Following Scatter Diagram Shows The Ols Estimates Of The Regression Line Which Represents The Relationsh 1 (57.68 KiB) Viewed 36 times

Problem 4. The following scatter diagram shows the OLS estimates of the regression line, which represents the relationship between inflation y (in percentage points) and unemployment x (in percentage points) for 12 countries in 2015. Inflation (1) 4.4 : -6.4-91x R=74 1.0 Unemployment (1) 7.0 3.5 a. (0.5 point) Is this relationship perfect or imperfect? Explain clearly. b. (0.5 point) Are the data on y and x cross-sectional or time-series? Clearly explain. c. (1 point) What do you expect the mean value of the residuals to be? Explain clearly by including the keyword "evenly" in your answer. d. (1.5 points) Find the correlation coefficient between y and x and explain what it implies for the relationship between y and x. e. (2 points) Let the standard error of the correlation coefficient estimate be 0.05. Do you reject the claim that there is a "zero correlation" or no relationship between y and x? Show your work. f. (1 point) Clearly interpret the Y-intercept estimate. g. (1 point) Clearly interpret the slope estimate. h. (1 point) Clearly interpret the R estimate.