# An economist is interested to see how consumption for an economy (in billions) is influenced by gross domestic product (billions)

(See the attached file for full problem description)

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.

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.991

R Square 0.982

Adjusted R Square 0.976

Standard error 0.299

Observations 10

ANOVA

df SS MS F SignifF

Regression 2 33.4163 16.7082 186.325 0.0001

Residual 7 0.6277 0.0897

Total 9 34.0440

Coeff StdError t Stat P-Value

Intercept -0.0861 0.5674 -0.152 0.8837

GDP 0.7654 0.0574 13.340 0.0001

Price -0.0006 0.0028 -0.219 0.8330

Referring to the table, what is the predicted consumption level for an economy with GDP equal to $4 Billion and an aggregate price index of 150?

A. 1.39 Billion

B. 2.89 Billion

C. 4.75 Billion

D. 9.45 Billion

Referring to the table, to test whether gross domestic product has a positive impact on consumption, the p-value is

A. 0.00005

B. 0.0001

C. 0.9999

D. 0.99995

Referring to the table, to test for the significance of the coefficient on aggregate price index, the value of the relevant t-statistic is

A. 2.365

B. 0.143

C. -0.219

-1.960

https://brainmass.com/statistics/regression-analysis/89058