From 1997 through 2004, the value of US exports to Mexico was as shown below. Data are in billions of dollars.
Year: 2001 2002 2003 2004
Exports: $101.3 $97.5 $97.4 $110.8
a. Fit a linear trend equation to the time series. Using this equation, determine the trend estimate for 2012.
b. Fit a quadratic equation to the time series, then use the equation to determine the trend estimate for 2012.
c. Construct a graph of the time series along with the equations fitted in parts (a) and (b). Which equation appears to better fit the data?
A step by step solution is provided to explain the concept of linear and quadratic trend lines to the time series.