Walmart revenue. Here’s a regression of monthly revenue of Walmart Corp, during 2004–2006 relating that revenue to the Total U.S. Retail Sales, the Personal Consumption Index, and the Consumer Price Index.

Dependent variable is: Walmart_Revenue R squared = 66.7% R squared (adjusted) = 63.8%

s = 2.327 with 39 - 4 = 35 degrees of freedom Source Sum of Squares df Mean Square F-ratio Regression 378.749 3 126.250 23.3 Residual 189.474 35 5.41354 Variable Coefficient SE(Coeff) t-ratio P-value Intercept 87.0089 33.60 2.59 0.0139 Retail Sales 0.000103 0.000015 6.67 60.0001 Persnl Consmp 0.00001108 0.000004 2.52 0.0165 CPI -0.344795 0.1203 -2.87 0.0070

a) Write the regression model.

b) Interpret the coefficient of the Consumer Price Index (CPI). Does it surprise you that the sign of this coefficient is negative? Explain.

c) Test the standard null hypothesis for the coefficient of CPI and state your conclusions.

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Residuals 2.5 0.0 + -2.5- + + -1.25 0.00 1.25 Nscores