Homework Help: Economics

Posted by Andrew on Wednesday, November 29, 2006 at 11:25pm.

The table below shows annual demand (in 1,000,000 units per year) for Widgets. Use this information to calculate a constant growth forecasting model. Use your growth model to forecast demand for the years 1995 and 2000.

Year Demand
1990 1.1
1991 1.5
1992 1.5
1993 1.8

All help is appreciated, considering the professor never taught us what a 'constant growth model' is.

Here the linear regression equation is Y=0.95+0.24t where Y= the output and t=the time.Hence the output in 1995 is
Y=0.95+(0.24).6=2.9
Output in 2000 is Y=0.95+(0.24).11=3.59

So, a constant growth forcasting model is the same as a linear forecasting model ?

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