The consumption function can be estimated by regressing private consumption on GNP. Use the data given in Table 2.2 and the MINITAB or SAS program to estimate the consumption function.

Table 2.2

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3-month T-bill Prime Private rate consumption rate Year GDP CPIb 1960 2,830.9 29.585 2.88 4.82 1,784.4 1961 2,896.9 29.902 2.35 4.50 1962 3,072.4 30.253 2.77 4.50 1,911.2 1,821.2 1,989.9 2,108.4 2,241.8 1963 3,206.7 30.633 3.16 4.50 1964 3,392.3 31.038 3.55 4.50 1965 3,610.1 31.528 3.95 4.54 1966 3,845.3 32.471 4.86 5.63 1967 3,942.5 33.375 4.31 5.63 1968 4,133.4 34.792 5.34 6.31 1969 4,261.8 36.683 6.67 7.95 2,677.4 2,369.0 2,440.0 2,580.7 7.91 2,740.2 2,844.6 5.72 5.25 3,019.5 3,214.1 1970 4,269.9 38.842 6.39 1971 4,413.3 40.483 4.33 1972 4,647.7 41.808 4.07 1973 4,917.0 44.425 7.03 8.02 3,169.1 1974 4,889.9 49.317 7.83 10.80 3,142.8 1975 4,879.5 53.825 5.78 7.86 1976 5,141.3 56.933 4.97 6.84 1977 5,377.7 60.617 5.27 1978 5,677.6 65.242 7.19 9.06 3,691.8 1979 5,855.0 72.583 10.07 12.67 3,779.5 1980 5,839.0 82.383 11.43 15.27 1981 5,987.2 90.933 14.03 18.87 1982 5,870.9 96.533 10.61 14.86 3,393.1 6.82 3,535.9 3,766.2 3,823.3 3,876.7 Private investment 296.5 294.6 332.0 354.3 383.5 437.3 475.8 454.1 480.5 508.5 475.1 529.3 591.9 661.3 612.6 504.1 605.9 697.4 781.5 806.4 717.9 782.4 672.8 Net Government exports expenditures* 111.5 111.5 119.5 119.5 130.1 136.4 143.2 151.4 130.1 136.4 143.2 151.4 171.6 171.6 192.5 192.5 209.3 209.3 221.4 221.4 233.7 233.7 246.4 246.4 263.4 263.4 281.7 281.7 317.9 317.9 357.7 357.7 383.0 383.0 414.1 414.1 453.6 453.6 500.7 500.7 566.1 566.1 627.5 627.5 680.4 680.4