Question

The general fund budget (in billions of dollars) for a U.S. state for 1988 (period 1) to 2011 (period 24) follows.

Year	Period	Budget ($ billions)
1988	1	3.03
1989	2	3.29
1990	3	3.56
1991	4	4.41
1992	5	4.36
1993	6	4.51
1994	7	4.65
1995	8	5.15
1996	9	5.34
1997	10	5.66
1998	11	6.01
1999	12	6.30
2000	13	6.58
2001	14	6.75
2002	15	6.56
2003	16	6.78
2004	17	6.98
2005	18	7.65
2006	19	8.38
2007	20	8.57
2008	21	8.76
2009	22	8.43
2010	23	8.33
2011	24	8.76

(a)

Construct a time series plot.

What type of pattern exists in the data?

The time series plot shows a horizontal pattern.

The time series plot shows a nonlinear trend.    

The time series plot shows a seasonal pattern.

The time series plot shows a linear trend.

(b)

Develop a linear trend equation for this time series to forecast the budget (in billions of dollars). (Round your numerical values to three decimal places.)

T_t =

(c)

What is the forecast (in billions of dollars) for period 25? (Round your answer to two decimal places.)

$ _______ billion

Answer 1

a)

The time series plot shows a linear trend.

b)

Tt =3.025+0.254t

c)

predicted val=3.025+25*0.254=

9.38 billion