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Country Independence Rating Inflation Rate (%)
New Zealand -1.4 7.6
Italy -0.75 7.2
Belgium -0.3 4.0
France 0.4 6.0
Canada 0.9 4.5
US 1.6 4.0
Switzerland 2.2 3.0

a) Use the method of lease squares to obtain the straight line that best fits these data
b) What relationship between independence of banks and inflation is indicated by the least-squares line?
c) Japan has a .6 independence rating. Use the least squares line to estimate Japan's inflatin rate.
d) The inflation rate for Britain is 6.8. Use the least squares line to estimate Britain's independence rating.

 

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