Access the Retailsales.xls data file (see below) to answer problems. This data file reports the percentage change in total domestic retail sales and the percentage change in the U.S. GDP over a recent ten-year period.

1. Use KStat to perform a regression of % chg in Retail Sales using %chg in GDP as the independent variable.

a. Write the estimated regression equation.

b. Use the regression to estimate how much a one percentage point increase in GDP will affect retail sales.

c. Provide a 95% confidence interval for your estimate in part b.

d. Provide a 90% confidence interval for you estimate in part b.

e. Using a= 0.05, can you reject the null hypothesis that the true coefficient multiplying % chg in GDP is zero?

2. Use the regression from problem 1.

a. Predict the %chg in Retail Sales in a year where the GDP increases by 3.0%.

b. Provide a 95% prediction interval for your estimate.

c. Provide a 90% prediction interval for your estimate.

d. Using the same prediction, estimate the probability that the %chg in Retail Sales will be greater than 8.5

DATA:

year	%chg in GDP	% chg in Retail Sales
1993	2.7	6.8
1994	4	8.1
1995	2.7	5
1996	3.6	6.1
1997	4.4	4.6
1998	4.3	5
1999	4.1	8.6
2000	3.8	6.7
2001	0.3	3.7
2002	2.6	3.4
A.C. Nielsen: facts figures and the future feb 2003