' 1 quesuo" With inflation and the impact of higher prices on households' cost of living under the spotlight, the Office for National Statistics(ONS) announced changes to the 2022 basket of goods to reflect people's inflation experiences in the UK, in line with the current circumstances. Not yet saved Marked out of 8.00 Below are three regression outputs tting the consumer prices index (CPI) to a different basket of goods, each basket of goods F Flag question _ _ conSIsts of 55 consumer Items. Regression Statistic. Basket of Goods 1 Basket of Goods 2 Basket of Goods 3 Multiple R 0.047 0.303 0.821 R square 0.002 0.092 0.674 Adjusted R Square 0.01 7 0.075 0.667 Standard Error 1.586 1.312 0.886 Observations 55 55 55 Basket of Goods 1 Coefficients Standard Error t Stat P-value Intercept 5.534 1.082 5.116 0 Basket of Goods 1 * * 0.113 0.344 0.732 Basket of Goods 2 Coefficients Standard Error t Stat P-value Intercept 4.341 0.69 6.293 0 Basket of Goods2 0.142 0.061 * * 0.024 Basket of Goods 3 Coefficients Standard Error t Stat P-value Intercept -7.944 1.345 -5.907 0 Basket of Goods3 1.16 0.111 10.459 * *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 specied. 1. (2 mark) What is the value of the regression slope between CPI and Basket of Goods 1? (3dp remember to include a negative sign if appropriate) with the degrees of freedom equals to (integer) 2. (1 mark) What is the absolute value of the test statistic for CPI and Basket of Goods 2? (3dp) 3. {2 mark) Is there a significant linear relationship between CPI and Basket of Goods 3 3 The economists are interested in which basket of goods most accurately predicts CPI. Use the regression results to answer the following questions. 4. (1 marks) Which variable is a better predictor of CPI? 0 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. 5. (2 marks) Why? Choose the most appropriate answers to justify your answer to Question 4 above. A. Correlation between CPI and Basket of Goods 1 is the highest. B. Correlation between CPI and Basket of Goods 2 is the highest. C. Correlation between CPI and Basket of Goods 3 is the highest. D. The slope of regression equation for the linear relationship between CPI and Basket of Goods 1 was significantly different than zero. E. The slope of regression equation for the linear relationship between CPI and Basket of Goods 2 was significantly different than zero. F. The slope of regression equation for the linear relationship between CPI and Basket of Goods 3 was significantly different than zero. G. Both A & D H. Both B & E 1. Both C & F J. There is not enough information to make a decision