Determine the correlation between the unadjusted and the adjusted monthly data (=CORREL(unadjust., adjust.) in Excel), and produce scatterplots (with straight lines) of both. Do you think making a seasonal adjustment will be useful, given what you observe at this point?

Run four regressions: 1) seasonally unadjusted monthly as the dependent, and t and t² as the independents, 2) seasonally unadjusted monthly as the dependent, and t, t², and D as the independents, 3) seasonally adjusted monthly as the dependent, and t and t² as the independents, and 4) seasonally adjusted monthly as the dependent, and t, t², and D as the independents. Discuss your findings, and determine which of the four models is the best for forecasting new home sales. When interpreting your p-values, remember that, say, 1.0E-08 is 1.0 * 10^-8, which is 0.00000001. State the equation that would be used to forecast sales.

\f