Task 1 : Discuss using on purchasing power parity (PPP)

Exchange rate CPI( Australia/ United States of America) $ 0.8900 0.4464 $ 0.8746 0.4473 $ 0.7256 0.4535 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.9994954269 0.9989911085 0.9979822169 0.0040786168 3 ANOVA df Regression Residual Total Intercept CPI( Australia/ United States of America) SS MS F 1 0.0164718716 0.0164718716 990.1868 1 1.6635115E-005 1.663511E-005 2 0.0164885067 Coefficients Standard Error t Stat P-value 11.372565291 0.3350392661 33.943977441 0.01875 -23.476466652 0.7460606981 -31.467234117 0.020224 Significance F 0.020224 Lower 95%Upper 95%Lower 95.0% Upper 95.0% 7.115488 15.62964 7.115488 15.62964 -32.95607 -13.99687 -32.95607 -13.99687 Exchange rate (USD/AUD) Australia CPI USA CPI Sep-13 $ 1.0774 104 234.1 Dec-13 $ 1.1123 104.8 233 Mar-14 $ 1.1009 105.4 236.3 Jun-14 $ 1.0679 105.9 238.3 Sep-14 $ 1.1045 106.4 238 Dec-14 $ 1.2107 106.6 234.8 Mar-15 $ 1.2927 106.8 236.1 Jun-15 $ 1.2958 107.5 238.6 Sep-15 $ 1.4170 108 237.9 Dec-15 $ 1.3798 108.4 236.5 Mar-16 $ 1.3357 108.2 238.1 Jun-15 $ 1.3512 108.6 241 USA CPI/Australia CPI 2.2510 2.2233 2.2419 2.2502 2.2368 2.2026 2.2107 2.2195 2.2028 2.1817 2.2006 2.2192 SUMMARY OUTPUT Regression Statistics Multiple R 0.845184 R Square 0.714336 Adjusted R Squa 0.68577 Standard Error 0.073229 Observations 12 ANOVA df Regression Residual Total SS MS F Significance F 1 0.134096 0.134096 25.00617 0.000537 10 0.053625 0.005363 11 0.187721 Coefficients Standard Error t Stat P-value Lower 95% Intercept 12.52732 2.259519 5.544242 0.000246 7.492796 USA CPI/Australi-5.089351 1.017745 -5.000617 0.000537 -7.357028 Significance F Upper 95%Lower 95.0% Upper 95.0% 17.56184 7.492796 17.56184 -2.821675 -7.357028 -2.821675