Average hourly earnings in the U.S. retail trade industry (in current dollars an
ID: 3440951 • Letter: A
Question
Average hourly earnings in the U.S. retail trade industry (in current dollars and constant dollars) are shown in the table.
Year
1997
2001
2005
2010
2012
Current dollars
6.88
8.94
11.75
14.13
17.29
Constant dollars
15.70
13.39
10.87
9.00
7.97
a. Define the terms current dollars and constant dollars. You will have to
look these terms up
b. Find the least squares regression line that approximates the average hourly earnings in both current dollars and constant dollars for this industry. Find the correlation coefficient in both cases. Comment on the meanings of the correlation coefficients.
c. Find where the two regression lines that you obtained in part b intersect. What does this point mean?
d. What are the slopes of the regression lines? What do they mean? (Use correct units.) What does this say about the long-term prospects of retail trade industry employees?
e. Use the regression lines to estimate the difference in current dollar and constant dollar hourly earnings in the year 2015.
f.Graph both of the regression lines on the same set of axes.
g.If you were a union negotiator for employees in the retail trade industry, how would you use this information?
Year
1997
2001
2005
2010
2012
Current dollars
6.88
8.94
11.75
14.13
17.29
Constant dollars
15.70
13.39
10.87
9.00
7.97
Explanation / Answer
Average hourly earnings in the U.S. retail trade industry (in current dollars an
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