QUESTION 5 A consumer's spending is widely believed to be a function of their income. To estimate this relationship, a u

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QUESTION 5
A consumer's spending is widely believed to be a function of
their income. To estimate this relationship, a university professor
randomly selected 19 of his students and collected information on
their spending (Y, in dollars) and income (X, in dollars) patterns
in week 6 of the semester. Assuming a linear relationship between Y
and X, the professor used the least-squares method and found that
the Y intercept = 20.90 and the slope = 0.66. Also, the sum of
squares total (SST) and the error sum of squares (SSE) were equal
to 65600.74 and 12769.51, respectively. Based on this
information, the coefficient of determination can be interpreted as
follows
80.53% of the variation in weekly spending is explained by the
variation in a student's weekly income.
19.47% of the variation in weekly spending is
explained by the variation in a student's weekly
income.
80.53% of the variation in weekly income is
explained by the variation in a student's weekly
spending.
19.47% of the variation in weekly income is
explained by the variation in a student's weekly
spending.