Question: Consider the following trend models estimated from 30 observations. Linear Model: y t = 24 + 0.12 t Quadratic Model 2: y t = 30

Consider the following trend models estimated from 30 observations.

Linear Model: yt = 24 + 0.12t

Quadratic Model 2: yt = 30 + 0.20t 0.01t2

Make a forecast for t = 31 and t = 32 with both models.

Note: Do not round intermediate calculations. Round final answers to 2 decimal places.

t Linear Model Quadratic Model

31 _______ ________

32 _______ ________

Which is the preferred model for forecasting if, relative to the linear model, the quadratic model has higher R2 but lower adjusted R2?

________ because it has _______ _________.

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