A simple linear regression, y = 0 + 1 x + is estimated with

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A simple linear regression, y = β0 + β1x + ε is estimated with time series data. The resulting residuals e and the time variable t are shown in the accompanying table.

A simple linear regression, y = β0 + β1x +


a. Graph the residuals against time and look for any discernible pattern.
b. Which assumption is being violated? Discuss its consequences and suggest a possibleremedy.

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