A Regression of Exports as a Function of Imports in 1991

question 40

Multiple Choice

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.

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