Question: In problem D.1, an attempt is made to predict inflation on the basis of years of unemployment. a. Construct a 95% confidence interval estimate of

In problem D.1, an attempt is made to predict inflation on the basis of years of unemployment.

a. Construct a 95% confidence interval estimate of the mean inflation rate when the unemployment rate is 3.5%.

b. Construct a 95% prediction interval of the inflation rate when the unemployment rate is 3.5%.

c. Explain the difference in the results in

(a) and (b).

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