Question
Consider the output of a regression analysis shown below. Quantity = 13 0.24*Price + 1.55*GDP growth Note that GDP growth is expressed in percent
Consider the output of a regression analysis shown below. Quantity = 13 — 0.24*Price + 1.55*GDP growth
Note that GDP growth is expressed in percent form (1.5, 0.5), not decimal form (0.015, 0.005).
a. How would a decline of GDP growth from 1.5 percent to 0.5 percent affect demand? Assume price remains unchanged at $10. Show how you calculated your answer.
b. Is this a change in quantity demanded or a change in demand?
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Solution The given regression equation is Quantity 13 024 x Price 155 x GDP growth a Impact of a Dec...
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Business Statistics
Authors: Norean Sharpe, Richard Veaux, Paul Velleman
3rd Edition
978-0321944726, 321925831, 9780321944696, 321944720, 321944690, 978-0321925831
