Question: (5 points) The following table contains the observations of consumption (in $100) and disposable income (in $100).

Consumption ($100) Disposable Income ($100)

2.0 5.0

3.2 10.0

3.5 10.0

4.2 15.0

4.6 15.0

5.0 20.0

6.0 20.0

1. To investigate the relationship between the consumption and disposable income using OLS estimation, derive and calculate both the intercept and slope in the following equation
   \[\hat{C}=\hat{\alpha }+\hat{\beta }I\]
   where C denotes consumption and I denotes the disposable income.
2. How much of the consumption can be explained by the disposable income? Explain.

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