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    Mean demand

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    An econometrician is interested in evaluating the relation of demand for building materials to mortgage rates in Los Angles and San Francisco. He believes that the appropriate model is

    Y = 10 + 5X1 + 8X2

    Where X1 = mortgage rate in %
    X2 = 1 if San Francisco, 0 if LA
    Y = demand in $100 per capita

    Referring to the information above, holding constant the effect of city, each additional increase of 1% in the mortgage rate would lead to an estimated increase of _________ in the mean demand.

    A. $10
    B. $50
    C. $60
    D. $500

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    https://brainmass.com/statistics/correlation-and-regression-analysis/mean-demand-89718

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    An econometrician is interested in evaluating the elation of demand for building materials to mortgage rates in Los Angles and San Francisco. He believes that the appropriate model is

    Y = 10 + 5X1 + 8X2

    Where X1 = mortgage rate in %
    X2 = 1 if San Francisco, 0 ...

    Solution Summary

    Solution shows calculations of estimated increase in mean demand.

    $2.19

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