This analysis compares a model that has y as the response to a model that uses t

Question

This analysis compares a model that has y as the response to a model that uses the change in y, yt - yt-1 as the response. These data are monthly based on seasonally adjusted data for three years. The scatterplots and tables found below summarize the fit of the regressions. Complete parts a through d. Click the icon to view the summary of the regression y on lag y. Click the icon to view the summary of the regression change in y on lag y. (a) Why are there 36 observations for- fitting these models, even though the change and the lagged predictor use yt? Shouldn't one observation be lost from lagging the variable? A The value of the lost observation was predicted using the models B The value of the lost observation was forecast using the models C Data from the previous month replaced the lost observation D A reasonable estimate of the lost observation was used

Explanation / Answer

The correct option is "Data from the previous month replaced the lost observation."

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