1. Economics
2. Econometrics
3. Regression
4. 420993

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Use regression analysis to explain the relationship between the two variables.

Assignment #4: Interpreting Macroeconomic Conditions

Supplement to Assignment 4 and Guidelines
The table below shows the year (first column), the real GDP in billions of chained 2005 dollars (second column), and the domestic exchange rate for one dollar against the aggregate of industrialized countries (third column).
1969 4,258.20 0.65
1970 4,266.30 0.67
1971 4,409.50 0.68
1972 4,643.80 0.69
1973 4,912.80 0.71
1974 4,885.70 0.72
1975 4,875.40 0.73
1976 5,136.90 0.75
1977 5,373.10 0.76
1978 5,672.80 0.72
1979 5,850.10 0.73
1980 5,834.00 0.71
1981 5,982.10 0.89
1982 5,865.90 1.02
1983 6,130.90 1.12
1984 6,571.50 1.27
1985 6,843.40 1.31
1986 7,080.50 1.01
1987 7,307.00 0.86
1988 7,607.40 0.84
1989 7,879.20 0.90
1990 8,027.10 0.78
1991 8,008.30 0.80
1992 8,280.00 0.77
1993 8,516.20 0.85
1994 8,863.10 0.84
1995 9,086.00 0.77
1996 9,425.80 0.79
1997 9,845.90 0.88
1998 10,274.70 0.89
1999 10,770.70 0.94
2000 11,216.40 0.92
2001 11,337.50 0.89
2002 11,543.10 0.94
2003 11,836.40 1.13
2004 12,246.90 1.24
2005 12,623.00 1.24
2006 12,958.50 1.25
2007 13,206.40 1.37
2008 13,161.90 1.47
2009 12,703.10 1.39
2010 13,088.00 1.32

After the determination of the percentage changes in output and exchange rates, analyze the influence of output fluctuation with respect to changes in domestic exchange rates.