Question # 1.
The following data represent the income and expenditures (in thousand) of different families.
Families 1 2 3 4 5 6 7 8 9 10 11 12
Income 65 50 55 65 55 70 65 70 55 70 50 55
Expenditures 85 74 76 90 85 87 94 98 81 91 76 74
i) Draw scatter diagram and find the regression line for data.
ii) Test the hypothesis that 𝛽1=0 .
iii) Calculate the 𝑅
2
and interpret it
iv) Prove that 𝑡
2=F when testing 𝛽1=0.