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A graph the residualse against the values of the

A simple linear regression, y = β₀ + β₁ x + ε, is estimated with time series data. The resulting residuals e and the time variable fare shown below.

1134_time variable fare.png

a. Graph the residualse against the values of the explanatory variable x and look for any discernible pattern.

b. Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

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