Question: Using the index (with 1985 = 100) on housing starts in the United States per year from 1986 to 1997 given in the table below, forecast the index for 1998 using a three year and a five year moving average. Which of your estimates is better if the actual index of housing starts in the United States for 1998 is 163?

INDEX OF HOUSING STARTS IN THE U.S.: 1986 TO 1997 (WITH 1985=100)

1986 1987 1988 1989 1990 1991

116 122 121 121 111 97

1992 1993 1994 1995 1996 1997

113 125 146 142 156 162