Canadian retail sales in dollars for September 2006 to August 2009 are shown in the graph for Exercise 33. An autoregressive model has been fitted with two independent variables at lags of 1 and 12, with the following result:

Retail sales from September 2008 to August 2009 were:

a) What feature in the graph in Exercise 33 leads us to include Y(Lag12) in the model?

b) What does the coefficient of Y(Lag1) represent?

c) What does the coefficient of Y(Lag12) represent?

d) What is the forecast of retail sales for September 2009?

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Standard Coefficients 1308797295 0.21799026 Y (Lag12) 0.74949759 Error 4.35E+09 0.301185 | 0.766236 0.105997 0.100199 7.480117 2.8E-07 P-value t-stat Intercept Y (Lag1) 2.056569 0.052365 Sep-08 35,889,612,000 36,013,720,000 34,073,597,000 38,037,305,000 29,041,595,000 | 26,706,563,000 31,176,227,000 33,701,529,000 | 37,170,039,000 36,654,794,000 36,927,938,000 Aug-09 35,794,721,000