Purchase Solution

# Regression

Not what you're looking for?

To study the relationship between capacity utilization in manufacturing and inflation in the united states, Thomas Gittings obtained the following regression results based on the annual data from 1971-1988:

^
Y(sub(t))= -70.85 + .8880X(sub (t))

t= (-5.89) (5.90) r^2= 0.685

where Y= changes in inflation as measured by the wholesale price index and X= capacity utilization rate.

a. a priori, would you expect a positive relationship between Y and X? WHY? specific
b.how would you interpret the slope coefficient? specifics!
c. is the estimated slope coefficient statistically significant?
d. is it statistically different from unity?
e.the natural rate of capacity utilization is defined as the rate at which Y is zero. what is the rate for the period under study?

##### Solution Summary

The solution answers the question(s) below.

##### Solution Preview

a. a priori, would you expect a positive relationship between Y and X? WHY? specific
Capacity utilization rate is the percentage of an industry's or country's production capacity which is actually used, over some period of time. If capacity utilization rate (X) rises while capital input unchanged, more output will be produced, but less input needed. With more goods in the ...

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

##### Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

##### Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

##### Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.