A regression of exports as a function of imports in 1991 across industry types yielded exports = 68 - 0.3(imports),R² = .25,Prob F = .26,and RMSE = 30.If imports by an industry equal 60,what is the estimate of exports from this industry,and how confident are you of your estimate? A) Exports_estimated = 50, variation in imports explains 25% of variation in exports, and the F-test statistic is high, so we are confident in our estimate of exports. B) Exports_estimated = 86, variation in imports explains 25% of variation in exports, and the F-test statistic is high, so we are confident in our estimate of exports. C) Exports_estimated = 50, variation in exports explains 25% of variation in imports, and the F-test statistic is high, so we are confident in our estimate of exports. D) Exports_estimated = 86, variation in exports explains 25% of variation in imports, and the F-test statistic is high, so we are confident in our estimate of exports. E) Exports_estimated = 50, but the F-test statistic fails standard significance tests and the RMSE is large relative to estimated exports, so we are not confident in our estimate.

Question

A regression of exports as a function of imports in 1991 across industry types yielded exports = 68 - 0.3(imports),R² = .25,Prob > F = .26,and RMSE = 30.If imports by an industry equal 60,what is the estimate of exports from this industry,and how confident are you of your estimate? A) Exports_estimated = 50, variation in imports explains 25% of variation in exports, and the F-test statistic is high, so we are confident in our estimate of exports. B) Exports_estimated = 86, variation in imports explains 25% of variation in exports, and the F-test statistic is high, so we are confident in our estimate of exports. C) Exports_estimated = 50, variation in exports explains 25% of variation in imports, and the F-test statistic is high, so we are confident in our estimate of exports. D) Exports_estimated = 86, variation in exports explains 25% of variation in imports, and the F-test statistic is high, so we are confident in our estimate of exports. E) Exports_estimated = 50, but the F-test statistic fails standard significance tests and the RMSE is large relative to estimated exports, so we are not confident in our estimate.

Quizplus · Accepted Answer

The correct estimate of exports given imports of 60 is calculated using the regression equation exports = 68 - 0.3(imports), which gives exports = 68 - 0.3(60) = 50. The R-squared value of .25 indicates that 25% of the variation in exports is explained by imports, but the Prob > F value of .26 suggests that the model is not statistically significant at common significance levels (e.g., 0.05), indicating a lack of confidence in the model's estimates. The RMSE of 30 further suggests a large average deviation of the predicted values from the actual values, reinforcing the lack of confidence in the estimate.

A Regression of Exports as a Function of Imports in 1991