Assessing the Goodness of Fit of a Regression Line Involves

question 22

Essay

Assessing the goodness of fit of a regression line involves considering different information, and no single characteristic of data is sufficient for a good assessment. Consider the characteristics below. How does each contribute to an assessment of fit? That is, for each piece of information, what about it would indicate a "good" best-fit line?
a) The shape of the scatter plot
b) The correlation coefficient
c) The standard deviation of the residuals
d) The coefficient of determination

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Definitions:

Balanced Trade

A trade situation in which the value of a country's exports equals the value of its imports over a certain period.

Net Exports

The value of a country's total exports minus the value of its total imports.

Trade Surplus

The amount by which the value of a country's exports exceeds the cost of its imports.

Exports

Goods or services sold by one country to another, contributing to the selling country's gross domestic product.