2. Required information Consumer Prices, Capacity Utilization, Money Supply, and

Question

  

2.

Required information

Consumer Prices, Capacity Utilization, Money Supply, and Unemployment (n = 41, k = 4) Year ChgCPI CapUtil ChgM1 ChgM2 Unem 1966 2.9 91.1 2.5 4.6 3.8 1967 3.1 87.2 6.6 9.3 3.8 1968 4.2 87.1 7.7 8.0 3.6 1969 5.5 86.6 3.3 3.7 3.5 1970 5.7 79.4 5.1 6.6 4.9 1971 4.4 77.9 6.5 13.4 5.9 1972 3.2 83.3 9.2 13.0 5.6 1973 6.2 87.6 5.5 6.6 4.9 1974 11.0 84.4 4.3 5.4 5.6 1975 9.1 73.5 4.7 12.6 8.5 1976 5.8 78.2 6.7 13.4 7.7 1977 6.5 82.4 8.1 10.3 7.1 1978 7.6 84.3 8.0 7.5 6.1 1979 11.3 84.2 6.9 7.9 5.8 1980 13.5 78.7 7.0 8.6 7.1 1981 10.3 77.0 6.9 9.7 7.6 1982 6.2 71.0 8.7 8.8 9.7 1983 3.2 73.5 9.8 11.3 9.6 1984 4.3 79.4 5.8 8.6 7.5 1985 3.6 78.3 12.4 8.0 7.2 1986 1.9 78.4 16.9 9.5 7.0 1987 3.6 80.9 3.5 3.6 6.2 1988 4.1 83.9 4.9 5.8 5.5 1989 4.8 83.1 0.8 5.5 5.3 1990 5.4 81.6 4.0 3.8 5.6 1991 4.2 78.3 8.8 3.1 6.8 1992 3.0 79.4 14.3 1.6 7.5 1993 3.0 80.3 10.2 1.5 6.9 1994 2.6 82.8 1.8 0.4 6.1 1995 2.8 83.1 -2.0 4.1 5.6 1996 3.0 81.9 -4.1 4.8 5.4 1997 2.3 83.0 -0.7 5.7 4.9 1998 1.6 81.7 2.1 8.6 4.5 1999 2.2 80.8 2.6 6.0 4.2 2000 3.4 80.1 -3.1 6.0 4.0 2001 2.8 73.9 8.7 10.4 4.7 2002 1.6 73.0 3.2 6.3 5.8 2003 2.3 74.2 7.1 5.0 6.0 2004 2.7 76.6 5.3 5.8 5.5 2005 3.4 78.8 -0.2 4.0 5.1 2006 3.2 80.4 -0.5 5.3 4.6

Explanation / Answer

Enter data in Minitab.

Click on Stat->Regression and select Regression.

Select y and x variables.

Click OK.

The output is shown below:

Regression Analysis: ChgCPI versus CapUtil, ChgM1, ChgM2, Unem

Analysis of Variance

Source      DF   Adj SS Adj MS F-Value P-Value

Regression   4   71.869 17.967     2.61    0.051

CapUtil    1   34.237 34.237     4.98    0.032

ChgM1      1    3.956   3.956     0.58    0.453

ChgM2      1   17.474 17.474     2.54    0.120

Unem       1   45.512 45.512     6.62    0.014

Error       36 247.596   6.878

Total       40 319.465

Model Summary

      S    R-sq R-sq(adj) R-sq(pred)

2.62253 22.50%     13.89%       5.73%

Coefficients

Term        Coef SE Coef T-Value P-Value   VIF

Constant   -25.2     11.8    -2.14    0.039

CapUtil    0.281    0.126     2.23    0.032 1.785

ChgM1     -0.085    0.112    -0.76    0.453 1.420

ChgM2     0.220    0.138     1.59    0.120 1.171

Unem       1.051    0.409     2.57    0.014 2.192

Regression Equation

ChgCPI = -25.2 + 0.281 CapUtil - 0.085 ChgM1 + 0.220 ChgM2 + 1.051 Unem

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