According to the Massachusetts Department of Welfare, the spending (in billions of dollars) by Medicaid, the national health-care plan for the poor, over the 5-yr period from 1988 to 1992 is summarized in the accompanying table. (Here, x = 0 represents the beginning of the year 1988.) Find an equation of the least-squares line for these data. Please round the coefficients in your equation to three decimal places. Use the result of to estimate Medicaid spending for the year 1994, assuming the trend continued.
A) y = 0.114x + 1.550; $2.262 billion
B) y = 0.117x + 1.546; $2.217 billion
C) y = 0.114x + 1.550; $2.234 billion
D) y = 0.117x + 1.546; $2.248 billion

Question

According to the Massachusetts Department of Welfare, the spending (in billions of dollars) by Medicaid, the national health-care plan for the poor, over the 5-yr period from 1988 to 1992 is summarized in the accompanying table.  (Here, x = 0 represents the beginning of the year 1988.) Find an equation of the least-squares line for these data. Please round the coefficients in your equation to three decimal places. Use the result of to estimate Medicaid spending for the year 1994, assuming the trend continued.
A) y = 0.114x + 1.550; $2.262 billion 
B) y = 0.117x + 1.546; $2.217 billion 
C) y = 0.114x + 1.550; $2.234 billion 
D) y = 0.117x + 1.546; $2.248 billion

Quizplus · Accepted Answer

Using a regression calculator, we obtain the equation of the least-squares line to be: y = 0.114x + 1.550. 
To estimate Medicaid spending for the year 1994, we plug in x = 6 (since 1994 is 6 years after the start of 1988): 
y = 0.114(6) + 1.550 = 2.234 billion dollars. 
Therefore, the answer is choice C.

According to the Massachusetts Department of Welfare, the Spending (In