Many countries, especially those in Europe, have significant gold holdings. But, many of these countries also have massive debts. The following data show the total value of gold holdings in billions of U.S. dollars and the debt as a percentage of the gross domestic product for nine countries (WordPress and Trading Economics websites, February 24, 2012). Country Gold Value Debt China 63 17.7 France 146 81.7 Germany 203 83.2 Indonesia 33 69.2 Italy 147 119 Netherlands 36 63.7 Russia 50 9.9 Switzerland 62 55 U.S. 487 93.2 a. Develop a scatter diagram for the total value of a country’s gold holdings ($ billions) as the independent variable. b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? Do there appear to be any outliers and/or influential observations? Explain. c. Using the entire data set, develop the estimated regression equation that can be used to predict the debt of a country given the total value of its gold holdings.
Many countries, especially those in Europe, have significant gold holdings. But, many of these countries also have massive debts. The following data show the total value of gold holdings in billions of U.S. dollars and the debt as a percentage of the gross domestic product for nine countries (WordPress and Trading Economics websites, February 24, 2012).
| Country | Gold Value | Debt |
| China | 63 | 17.7 |
| France | 146 | 81.7 |
| Germany | 203 | 83.2 |
| Indonesia | 33 | 69.2 |
| Italy | 147 | 119 |
| Netherlands | 36 | 63.7 |
| Russia | 50 | 9.9 |
| Switzerland | 62 | 55 |
| U.S. | 487 | 93.2 |
a. Develop a
b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? Do there appear to be any outliers and/or influential observations? Explain.
c. Using the entire data set, develop the estimated regression equation that can be used to predict the debt of a country given the total value of its gold holdings.
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