# Calculation Of Regression And Making Scatter Plot

Question

The data for Consumer Price Index Y, (2000 = 100) and the money supply X (\$billions) for the US for the years 1959 – 2011 are presented in file CPIM2.wf1.

a. Draw a scatter plot for the pairs of variables below and comment on their relationship:
1. Y vs X

2. ln Y vs ln X

3. ln Y vs X

4. Y vs ln X.

b. Estimate a linear model for each of the pairs of variables in part a. Present the estimation results in the usual format, interpret the estimated slope coefficients and comment on the fitness of each of the models.

c. For each model, find the elasticity of Y with respect to X. [For some of these models, the elasticity is to be computed at mean values of Y and X.]

d. Based on all four regression results, which model would you choose. Justify your answer with comparisons of the fitness of the model using at least four different measures.

Summary

The question belongs to Statistics and it discusses about calculation of regression and plotting scatter plot and interpreting the results for the given data.

Total Word Count 595

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