I. The data in Table 1 reports the aggregate consumption (Y, in billions) and disposable income (X, in billions) for the prosperous land of Kumandra. Draw a scatter diagram for the data and determine by inspection if there exists an approximate linear relationship between Y and X. Approximately draw a straight-line between the plotted values. Can this data be used for a linear regression model? Why? II. In relation to item I, state the general relationship between Y and disposable X in 1. exact linear form 2. stochastic form.

Why do you think the plotted values do not fall exactly on a straight line?