Suppose you work for Lexmark (an ink company). You try to forecast future sales of printer ink based on the price of ink, the price of competitors ink, advertising expenditures, the local unemployment rate, and shipping costs.

Answer the following questions.

(a) A co-worker claims you should consider using a regression model with an interaction term. Why might your coworker suggest this?

(b) Another co-worker claims that this would be an example of basic research. Do you agree? Explain.