The consumer price index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services typically purchased by consumers. One of the items in this market basket that affects the CPI is the price of oil and its derivatives. The file titled Consumer contains the price of the derivatives of oil and the CPI adjusted to 2005 levels.
a. Produce a multiple regression equation depicting the relationship between the CPI and the price of the derivatives of oil.
b. Conduct a t -test on the coefficient that has the highest p -value. Use a significance level of 0.02 and the p -value approach.
c. Produce a multiple regression equation depicting the relationship between the CPI and the price of the derivatives of oil leaving out the variable tested in part b.
d. Referring to the regression results in part c, repeat the tests indicated in part b.
e. Perform a test of hypothesis to determine if the resulting overall model is statistically significant. Use a significance level of 0.02 and the p -value approach.