An economist wanted to investigate the factors that determined the price of petrol RON97. He gathered 17 months of data on the four variables below: Y = Price of petrol RON97 (RM/litre) X1 = Price of world oil (USD/barrel) X2 = Exchange rate (RM/USD) X3 = Quantity demand for petrol RON97 (million litre) The Excel results are shown as follows: ANOVA df Significance F 0.000 MS 0.467 Regression Residual 0.156 32.763 13 0.062 0.005 Total 16 0.529 Coefficients Standard Error t Stat p-value 0.094 0.000 0.003 Intercept -1.132 0.627 -1.805 X1 0.021 0.003 7.000 X2 -0.334 0.092 -3.630 X3 0.010 0.007 1.429 0.165 (a) Determine the regression equation. (b) Determine the coefficient of determination, and interpret. (c) Which independent variables linearly related to the price of petrol RON 95 in this model? Explain.

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An economist wanted to investigate the factors that determined the price of petrol RON97. He gathered 17 months of data on the four variables below:
Y = Price of petrol RON97 (RM/litre)
X1 = Price of world oil (USD/barrel)
X2 = Exchange rate (RM/USD)
X3 = Quantity demand for petrol RON97 (million litre)
The Excel results are shown as follows:
ANOVA
df
SS
MS
Significance F
Regression
Residual
0.467
0.062
3
0.156
32.763
0.000
13
0.005
Total
16
0.529
Coefficients Standard Error
t Stat
P-value
0.094
0.000
0.003
Intercept
-1.132
0.627
-1.805
X1
0.021
0.003
7.000
X2
-0.334
0.092
-3.630
X3
0.010
0.007
1.429
0.165
(a) Determine the regression equation.
(b) Determine the coefficient of determination, and interpret.
(c) Which independent variables linearly related to the price of petrol RON 95 in this model? Explain.
(d) Is the model valid? Explain.
Transcribed Image Text:An economist wanted to investigate the factors that determined the price of petrol RON97. He gathered 17 months of data on the four variables below: Y = Price of petrol RON97 (RM/litre) X1 = Price of world oil (USD/barrel) X2 = Exchange rate (RM/USD) X3 = Quantity demand for petrol RON97 (million litre) The Excel results are shown as follows: ANOVA df SS MS Significance F Regression Residual 0.467 0.062 3 0.156 32.763 0.000 13 0.005 Total 16 0.529 Coefficients Standard Error t Stat P-value 0.094 0.000 0.003 Intercept -1.132 0.627 -1.805 X1 0.021 0.003 7.000 X2 -0.334 0.092 -3.630 X3 0.010 0.007 1.429 0.165 (a) Determine the regression equation. (b) Determine the coefficient of determination, and interpret. (c) Which independent variables linearly related to the price of petrol RON 95 in this model? Explain. (d) Is the model valid? Explain.
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