Mary Palmquist, a Wall Street securities analyst, wants to determine the relationship between Chile's gross domestic product (GDP) and the profits (after taxes) of the Carlton Company. She obtains the following data concerning each variable:

a. What are the least- squares estimates of the intercept and slope of the true regression line, where Carlton's profits are the dependent variable and GDP is the in de pen dent variable?
b. On the average, what effect does a $1 increase in gross domestic product seem to have on the profits of Carlton?
c. If Ms. Palmquist feels that next year's GDP will be $2 trillion, what forecast of Carlton's profits will she make on the basis of the regression?
d. What is the coefficient of determination between the nation's gross domestic product and GE's profits?
e. Do the results obtained in previous parts of this problem prove that changes in Carlton's profits are caused by changes in the gross domestic product? Can we be sure that Carlton's profit is a linear function of the GDP? What other kinds of functions might be as good or better?
f. If you were the financial analyst, would you feel that this regression line was an adequate model to forecast Carlton's profits? Why or why not?

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Carlton's profits Gross domestic product (Billions of dollars) ear (Millions of dollars) 688 753 796 868 936 982 1,063 1,171 1,306 1.407 1,529 1,706 355 339 361 357 278 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 510 513 661 705 688 931 9