Chapter 14.2, Problem 14.20ACI

Personal consumption in transportation. There has been phenomenal growth in the transportation sector of the economy over the past decade. The personal consumption expenditure figures (in billions of dollars) over the past I 0 years are given in the table below.

a. Compute exponentially smoothed values of this personal consumption time series, using the smoothing constants w = .2 and w = .8.

b. Plot the actual series and the two smoothed series on the same graph. Comment on the trend in personal consumption expenditure on transportation in the 2000s.

Year	Expenditures
2006	1208.2
2007	1240.0
2006	1246.8
2009	1158.8
2010	1171.8
2011	1235.5
2012	1277.9
2013	1335.5
2014	1418.7
2015	1501.0