A Simple Linear Regression, ,Is Estimated Using Time-Series Data

question 48

Essay

A simple linear regression, ,is estimated using time-series data over the last 10 years.The residuals e,and the time variable t are shown in the accompanying table. a.Graph the residuals e against time and look for any discernible pattern.
B)Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

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Definitions:

Margin of Error

The range within which the true population parameter is expected to lie, with a certain level of confidence.

Confidence

In statistics, it often pertains to the degree of certainty or probability that a parameter falls within a specified range.

Population Variance

A measure of the spread of a distribution within an entire population, indicating how much the data differ from the mean.

T Distribution

A probability distribution that emerges in the context of estimating the mean for a normally distributed population, applicable when dealing with a small sample size and the population standard deviation is not known.