4i4,072.3893 i64.73797

which is distributed as the F distribution with 2 and i2 df. The computed F value is obviously highly significant; we can reject the null hypothesis that 2 = 3 = 0, that is, that per capita personal consumption expenditure is not linearly related to per capita disposable income and trend.

In Section C.9 we discussed the mechanics of forecasting, mean as well as individual. Assume that for i97i the PPDI figure is $26i0 and we wish to forecast the PPCE corresponding to this figure. Then, the mean as well as individual forecast of PPCE for i97i is the same and is given as

300.28625 0.74i98 8.04356

The variances of Yi97i and Yi97i, as we know from Section C.9, are different and are as follows:

26i0 i6

where (X'X) i is as shown in (C.i0.5). Substituting this into (C.i0.i7), the reader should verify that

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