The scatterplot that follows shows monthly values of consumer sentiment plotted versus inflation (see Exercise 31 for the definition of these variables). For this plot, we€™ve shown the full history of the consumer survey back to January 1978. The subset of the points in black shows data since 2004.

(a) Describe the association between these two variables over the full time period. Is the association strong? Is the relationship linear?
(b) Does the addition of the older data change your impression of the association between these two variables? To see a scatterplot of only the data since 2004, see Exercise 31.
(c) Do you think that the addition of the data prior to 2004 increases or decreases the size of the correlation?

Transcribed Image Text:

Alal | D | E | F | G | H 100 90 780 10 s0 12 10 15 13 Inflation (Year-over-year % change) 16