Ed Bogdanski, owner of the American Precast Company, has hired you as a part-time analyst. Ed was extremely pleased when you determined that there is a positive relationship between the number of building permits issued and the amount of work available to his company. Now he wonders if it is possible to use knowledge of interest rates on first mortgages to predict the number of building permits that will be issued each month. You collect a random sample of nine months of data, as shown in Table P-11.

a. Plot the data as a scatter diagram.
b. Determine the fitted regression function.
c. Test for the significance of the slope coefficient at the .05 significance level.
d. When the interest rate increases by 1%, what is the average decrease in the number of building permits issued?
e. Compute the coefficient of determination.
f. Write a sentence that Ed can understand, interpreting the number computed in part e.
g. Write Ed a memo explaining the results of your analysis.

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TABLE P-11 Building Permits Interest Rate (%) Month 786 494 289 892 343 10.2 12.6 13.5 9.7 10.8 9.5 10.9 9.2 14.2 509 987 187