(A) Using the above estimated regression equation for the seasonal demand for coffee in the United...

 

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(A) Using the above estimated regression equation for the seasonal demand for coffee in the United States, and predicting that the values of the independent or explanatory variables (P,Y and P') in the demand equation from the 3rd quarter of 1977 to the 2nd quarter of 1978 are those indicated in the table below, your job is to forecast the demand for coffee for (i) (ii) The third (3d) quarter of 1977, The fourth (4th) quarter of 1977. (iii) The first (1) quarter of 1978, and (iv) The second (2nd) quarter of 1978. Quarter P 3rd quarter of 1977 1.86 4th quarter of 1977 1.73 1st quarter of 1978 1.60 Ond quarter of 1978 1.46 Y P 3.57 1.10 3.60 1.03 3.63 1.07 3.67 1.05 (B) How much confidence (too much or too little) can we have in these forecasts? What could cause the forecasting error to be very large? (A) Using the above estimated regression equation for the seasonal demand for coffee in the United States, and predicting that the values of the independent or explanatory variables (P,Y and P') in the demand equation from the 3rd quarter of 1977 to the 2nd quarter of 1978 are those indicated in the table below, your job is to forecast the demand for coffee for (i) (ii) The third (3d) quarter of 1977, The fourth (4th) quarter of 1977. (iii) The first (1) quarter of 1978, and (iv) The second (2nd) quarter of 1978. Quarter P 3rd quarter of 1977 1.86 4th quarter of 1977 1.73 1st quarter of 1978 1.60 Ond quarter of 1978 1.46 Y P 3.57 1.10 3.60 1.03 3.63 1.07 3.67 1.05 (B) How much confidence (too much or too little) can we have in these forecasts? What could cause the forecasting error to be very large?