Canada’s trade balance with the rest of the world has been steadily increasing over the past several years. It is well known that the U.S. is Canada’s leading trade partner. Is there a predictable linear relationship between our total trade balance and our trade balance with the U.S.? Develop a regression model to predict the trade balance with the U.S. by our trade balance with the rest of the world. Comment on the strength of the model. Develop a time-series trend line for trade balance with the rest of the world by using the time periods given. Forecast total trade balance with the rest of the world for 2020 using this equation.

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Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Trade Balance ($ millions) Rest of the World 2,290 2,486 2,776 2,648 3,068 3,688 4,111 4,172 3,669 3,493 U.S. 4,991 4,709 4,641 5,220 5,041 4,750 4,321 4,699 4,777 4,809