We are analyzing the effects of regime type on corruption rates with the following model: Corruption = 10 - 0.1 GDP (per capita) - 2.0 Democracy
Where Corruption is an index of corruption, GDP (per capita) is measured in thousands of dollars, and Democracy is a dummy variable that is equal to one if a country is a democracy and 0 otherwise. What is the expected rate of corruption of a democratic country with a per capita GDP of $50,000?

Question

Quizplus · Accepted Answer

Plugging in the given values, we get: Corruption = 10 - 0.1 (50)- 2.0 (1) Simplifying the equation, we get: Corruption = 10 - 5 + 2 = 7 Therefore, the expected rate of corruption of a democratic country with a per capita GDP of $50,000 is 7.

We Are Analyzing the Effects of Regime Type on Corruption