Suppose an Economic Research Centre has published data on GDP and demand for refrigerators as given below.

Year 2000 2001 2002 2003 2004 2005 2006 GDP (bill. `)

20 22 25 27 30 33 35 Refrigerators (mill. units) 50 60 80 80 90 100 120

(

a) Estimate regression equation R = a + bY, where R = No. of refrigerator sold and Y = GDP.

(

b) Forecast demand for refrigerators in the years 2007 and 2008. The research centre has projected GDP for 2007 and 2008 at `38 billion and `40 billion respectively.

[Ans. (

a) R = – 3.108 + 0.4145 Y (

b) R 2007 = 12.68 million, R 2008 =

13.51 million]