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Time Series and Forecasting

A). Predict the average price of bread for the next 3 months (time = 205,206,207).

b). Test the significance of the slope for this model.

c). Is the graph consistent with the results of your hypothesis test? Explain why or why not.

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Solution Summary

Ex. 16.21
The Bureau of Labor Statistics (BLS) reports data on commodity prices on a monthly basis. These data are reported on a regional and national basis. The following graph displays the monthly average price (cents per pound) of white bread in the U.S. for the years 1980-1996.

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1 15 29 43 57 71 85 99 113 127 141 155 169 183 197

Coefficients Standard Error tStat P-value

Intercept 0.456250652 0.004516911 101.0094 7.1E-175
Time 0.001819793 3.82101E-05 47.62591 8.7E-112

a). Predict the average price of bread for the next 3 months (time = 205,206,207).

b). Test the significance of the slope for this model.

c). Is the graph consistent with the results of your hypothesis test? Explain why or why not.

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