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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

Attachments

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