8.1 Sales of a company is $243 million in 2013, and it increases to $250 million in...

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8.1 Sales of a company is $243 million in 2013, and it increases to $250 million in 2014.

a. Compute the percentage increase in sales, using the usual formula 100 * (Sales2014 - Sales2013)
Sales2013 . Compare this value to the approximation.
100 * 3ln(Sales2014) - ln(Sales2013)4.

b. Repeat (a), assuming that Sales2014 = 255, Sales2014 = 260, and Sales2014 = 265.

c. How good is the approximation when the change is small? Does the quality of the approximation deteriorate as the percentage change increases?

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Introduction To Econometrics

ISBN: 9781292071367

3rd Global Edition

Authors: James Stock, Mark Watson

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Question Posted: Oct 26, 2024 01:00 AM

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8.1 Sales of a company is $243 million in 2013, and it increases to $250 million in...

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Introduction To Econometrics

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