1. Consider the following results of a multiple regression model of dollar price of unleaded gas (dependent variable) and a set of independent variables: price of crude oil, value of S&P500, price U.S. Dollars against Euros, personal disposal income (in million of dollars) and answer the following questions:

	Coefficient	t-statistics
Intercept	0.5871	68.90
Crude Oil	0.0651	32.89
S&P 500	-0.0020	18.09
Price of $	-0.0415	14.20
PDI	0.0001	17.32

R-Square = 97% a. What is the interpretation of coefficient for S&P500?

		Every 1 unit increase in the value of S&P500 will cause unleaded gas price to increase by 0.20 cents.
		Every 1 unit increase in the value of S&P500 will cause unleaded gas price to decrease by 0.20 cents.
		Every 1% increase in the value of S&P500 will cause unleaded gas price to increase by 0.20 cents.
		Every 1 unit increase in the value of S&P500 will cause unleaded gas price to decrease by 0.2%

b. What is the interpretation of coefficient for crude oil?

		Every 1% increase in crude price will cause unleaded gas price to increase by 6.51 cents.
		Every $1 increase in crude price will cause unleaded gas price to increase by 6.51%.
		Every 1% increase in crude price will cause unleaded gas price to decrease by 6.51 cents.
		Every $1 increase in crude price will cause unleaded gas price to increase by 6.51 cents.

c. What will be forecasted price of unleaded gas if the value of independent variables are as follows: Crude Oil = 90; S&P500 = 1725; Price of $ = 0.90 Euros; PDI = 800

		$2.71
		$3.04
		$2.66
		$2.99