Purchase Solution

Variation of consumption

Not what you're looking for?

Ask Custom Question

An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($ billions) and aggregate price (consumer price index). The Microsoft Excel output of this regression is partially reproduced below.

Referring to Table 14-3, when the economist used a simple linear regression model with consumption as the dependent variable and GDP as the independent variable, he obtained an r2 value of 0.971. What additional percentage of the total variation of consumption has been explained by including aggregate prices in the multiple regression?

A) 98.2
B) 1.1
C) 2.8
D) 11.1

Purchase this Solution

Solution Summary

This provides an example of working with variation of consumption and aggregate prices in the context of regression analysis.

Solution Preview

Answer is B) 1.1

Explanation:

The percentage of the total variation of consumption explained by taking GDP as the ...

Purchase this Solution


Free BrainMass Quizzes
Operations Management

This quiz tests a student's knowledge about Operations Management

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Basics of corporate finance

These questions will test you on your knowledge of finance.