The following table gives you data on Y (gross domestic product), I (gross private domestic investment), and C (personal consumption expenditure) for the United States for the period 1970€“2006. All data are in 1996 billions of dollars. Assume that C is linearly related to Y as in the simple Keynesian model of income determination of Example 18.2. ObtainOLSestimates of the parameters of the consumption function. Save the results for another look at the same data using the methods developed in Chapter 20.

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Observation Observation 1970 2,451.9 2,545.5 2,701.3 2,833.8 2,812.3 2,876.9 3,035.5 3,164.1 3,303.1 3,383.4 3,374.1 3,422.2 3,470.3 3,668.6 3,863.3 4,064.0 4,228.9 4,369.8 4,546.9 427.1 3,771.9 3,898.6 4,105.0 4,341.5 4,319.6 4,311.2 4,540.9 4,750.5 5,015.0 5,173.4 5,161.7 5,291.7 5,189.3 5,423.8 5,813.6 6,053.7 6,263.6 6,475.1 6,742.7 1989 4,675.0 4,770.3 4,778.4 4,934.8 5,099.8 5,290.7 5,433.5 5,619.4 5,831.8 6,125.8 6,438.6 6,739.4 6,910.4 7,099.3 7,295.3 7,561.4 7,803.6 8,044.1 926.2 6,981.4 7,112.5 7,100.5 7,336.6 7,532.7 7,835.5 8,031.7 8,328.9 8,703.5 9,066.9 9,470.3 9,817.0 9,890.7 10,048.8 10,301.0 10,675.8 11,003.4 11,319.4 1971 475.7 1990 895.1 1972 1991 532.1 822.2 1973 594.4 1992 889.0 1993 1974 550.6 968.3 1975 453.1 1994 1,099.6 1,134.0 1,234.3 1,387.7 1,524.1 1,642.6 1,735.5 1,598.4 1,557.1 1,613.1 1,770.2 1,869.3 1,919.5 1995 1976 544.7 1977 627.0 1996 1978 702.6 1997 1998 1979 725.0 645.3 1980 1999 1981 704.9 2000 2001 606.0 1982 1983 662.5 2002 2003 1984 857.7 1985 849.7 2004 2005 1986 843.9 1987 870.0 2006 1988 890.5