The Consumer Price Index (CPI) is a measure of the cost to consumers of various goods and services in comparison to the cost of those items in previous years. The following table gives the CPI for all urban consumers for housing for selected years from 1987 to 1996. The years 1982-1984 serve as the base years for comparison, with the cost of housing in those years equal to 100.
T (years after 1987) | 0 | 3 | 4 | 7 | 9 |
CPI | 115.6 | 130.5 | 135.0 | 145.4 | 154.0 |
a. Find the linear model that best fits these data.
b. Use this linear model to predict the CPI for housing in 1989. Is your answer a reasonable approximation to 124.9, the actual 1989 CPI for housing? Explain your answer in terms of the plot of the data or the average rates of change between consecutive table entries.
c. Use the linear model to predict the year in which the CPI for housing will reach 165. What assumption are you making when you make this prediction?
d. Use the linear model to predict when the CPI for housing will reach 250. Why is it not a good idea to make such a prediction?
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.