Assume that assumptions for simple linear regression are satisfied. Use the above tables to answer the following questions, either choose the most correct option, or type in the answer to the number of decimal places specified.
(1 mark) The correlation between CPI and Basket of Goods 1 is: Answer (3dp - remember to include a negative sign if appropriate)
The economists are interested in which basket of goods most accurately predicts CPI. Use the regression results to answer the following questions.
(1 marks) Which variable is a better predictor of CPI? AnswerA: Basket of Goods 1.B: Basket of Goods 2.C: Basket of Goods 3.D: None of them is a good predictor of CPI.
A: Basket of Goods 1.
B: Basket of Goods 2.
C: Basket of Goods 3.
D: None of them is a good predictor of CPI.