Table 5-13 gives data on the Consumer Price Index, Y(1980 = 100), and the money supply, X (billions of German marks), for Germany for the years 1971 to 1987.
CONSUMER PRICE INDEX (Y)(1980 = 100) AND THE MONEY
SUPPLY (X)(MARKS, IN BILLIONS), GERMANY, 1971-1987

a. Regress the following:
1. Y on X
2. In Y on In X
3. In y on X
4. Y on In X
b. Interpret each estimated regression.
c. For each model, find the rate of change of y with respect to X.
d. For each model, find the elasticity of y with respect to X. For some of these models, the elasticity is to be computed at the mean values of y and X.
e. Based on all these regression results, which model would you choose and why?

Year 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 110.02 125.02 132.27 37.17 159.51 176.16 190.80 216.20 232.41 237.97 240.77 249.25 275.08 283.89 296.05 325.73 354.93 64.1 67.7 72.4 82.0 85.6 88.7 91.1 94.9 100.0 106.3 115.6 118.4 121.0 120.7 121.1