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A the Seasonally Adjusted US Quarterly Industrial Production Index from the First

Question 121

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a. The seasonally adjusted US quarterly Industrial Production Index from the first quarter of 2001 to the fourth quarter of 2005 (yt, 2002 = 100) is shown in the table below. Would the linear or quadratic model fit better?  Time period yt Mar-01 136.7 Jun-01 124.1 Sep-01 120.5 Dec-01 117.4 Mar-02 101.1 Jun-02 102.5 Sep-02 98.5 Dec-02 97.9 Mar-03 94.0 Jun-03 86.7 Sep-03 89.8 Dec-03 92.3 Mar-04 95.9 Jun-04 89.6 Sep-04 86.3 Dec-04 84.5 Mar-05 88.7 Jun-05 109.9 Sep-05 100.9 Dec-05 108.4\begin{array}{|rl|}\hline\text { Time period } & y_{t} \\\hline \text { Mar-01 } & 136.7 \\\text { Jun-01 } & 124.1 \\\text { Sep-01 } & 120.5 \\\text { Dec-01 } & 117.4\\\text { Mar-02 } & 101.1 \\\text { Jun-02 } & 102.5 \\\text { Sep-02 } & 98.5 \\\text { Dec-02 } & 97.9 \\\text { Mar-03 } & 94.0 \\\text { Jun-03 } & 86.7 \\\text { Sep-03 } & 89.8\\\text { Dec-03 } & 92.3 \\\text { Mar-04 } & 95.9 \\\text { Jun-04 } & 89.6 \\\text { Sep-04 } & 86.3 \\\text { Dec-04 } & 84.5 \\\text { Mar-05 } & 88.7 \\\text { Jun-05 } & 109.9 \\\text { Sep-05 } & 100.9 \\\text { Dec-05 } & 108.4\\\hline\end{array} b. Use Excel and the regression technique to calculate the linear trend line and the quadratic trend line. Which model fits better?

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a. blured image The quadratic model appear...

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