Consider the following data on income and savings of a sample of residents in a locality: $$\begin{array} { c | c }
\text { Income (\$ thousands) } & \text { Savings (\$ thousands) } \
\hline 50 & 10 \
51 & 11 \
52 & 13 \
55 & 14 \
56 & 15 \
58 & 15 \
60 & 16 \
62 & 16 \
65 & 17 \
66 & 17
\end{array}$$
a. Compute the correlation coefficient. Is there a positive correlation between the income and savings? What is your interpretation?
b. Show a scatter diagram of the relationship between the income and savings.

Question

Consider the following data on income and savings of a sample of residents in a locality: $$\begin{array} { c | c } 
\text { Income (\$ thousands) } & \text { Savings (\$ thousands) } \
\hline 50 & 10 \
51 & 11 \
52 & 13 \
55 & 14 \
56 & 15 \
58 & 15 \
60 & 16 \
62 & 16 \
65 & 17 \
66 & 17
\end{array}$$ 
a. Compute the correlation coefficient. Is there a positive correlation between the income and savings? What is your interpretation?
b. Show a scatter diagram of the relationship between the income and savings.

Quizplus · Accepted Answer

The Answer of Consider the following data on income and savings of a sample of residents in a locality: $$\begin{array} { c | c } 
\text { Income (\$ thousands) } & \text { Savings (\$ thousands) } \
\hline 50 & 10 \
51 & 11 \
52 & 13 \
55 & 14 \
56 & 15 \
58 & 15 \
60 & 16 \
62 & 16 \
65 & 17 \
66 & 17
\end{array}$$ 
a. Compute the correlation coefficient. Is there a positive correlation between the income and savings? What is your interpretation?
b. Show a scatter diagram of the relationship between the income and savings.

Consider the Following Data on Income and Savings of a Sample