The index of deflated turnover for retail trade shows the activity in volume of the retail trade sector. This index is reported with 2005=100. The accompanying table holds the index for 43 countries for the years 2007 and 2010. Complete parts?a) through?d).

Country 1: 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

Index_2007: 109.5 102.2 135.2 104.1 133.9 111.5 90.7 115.9 116.1 117.1 103.4 130.7 109.7 106.9 99.1 111.1 103.2 116.8 115.8 100.8 100.1 109.1 138.7 121.3 108.7 104.4 105.6 107.7 108.2 112.9 124.3 101.3 111.5 144.4 132.9 114.3 108.9 119.1 105.4 106.6 107.2 108.3 101.9

Index_2010: 116.3 106.2 170.1 104.4 125.8 120.1 134.2 123.9 118.4 119.1 93.6 101.3 111.5 111.6 97.4 93.9 93.3 77.9 106.1 97.7 100.6 120.6 92.1 92.5 123.7 104.7 104.5 101.5 103.9 116.2 142.5 99.1 144.3 147.8 152.8 109.3 108.6 120.9 91.2 111.6 114.9 111.7 94.6

a) Find a regression model predicting the 2010 index from the index in 2007 for the sample of 43 countries.

2010index= __ + __ 2007 index

?(Round to three decimal places as?needed.)

b) Examine the residuals to determine if a linear regression is appropriate.

Construct a plot of the residuals against x. Choose the correct graph below.