Hiroshi Sato, an owner o f a sushi restaurant in San Francisco, has been follow ing an aggressive m arketing campaign to thw art the effect of rising unem ploym ent rates on business. He used m onthly data on sales

($1,000s), advertising costs ($), and the unem ploym ent rate (%) from January 2008 to May 2009 to estim ate the follow ing sample regression equation:

a. Hiroshi had budgeted $620 toward advertising costs in May 2009. Make a forecast for Sales for June 2009 if the unemployment rate in May 2009 was 9.1%.

b. What w ill be the forecast if he raises his advertisement budget to $700?

c. Reevaluate the above forecasts if the unemployment rate was 9.5% in May 2009.