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You conjecture that sales growth in the auto industry depends on GDP growth. To verify this conjecture, you run a regression of real sales growth
You conjecture that sales growth in the auto industry depends on GDP growth. To verify this conjecture, you run a regression of real sales growth versus real GDP growth using data from 2000-2014 (real sales are computed with 2014 as the base year), and get the following results:
Assume that auto industry sales in 2013 and 2014 were $135 billion and $150 billion. In 2015, the forecasted real GDP growth rate is 2% and inflation rate is 4%.
What is the projected nominal growth rate in sales of the auto industry in 2015?
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