Answered: For the past 10 years, you have been…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

For the past 10 years, you have been observing the sales of your company since you embarked on an aggressive advertising campaign. You have been recording the amounts spent on advertising and the corresponding sales as follows:

Year	Advert (X)	Sales (Y)
2001	10	44
2002	9	40
2003	11	42
2004	12	46
2005	11	48
2006	12	52
2007	13	54
2008	13	58
2009	14	56
2010	15	60

You would like to determine whether a relationship exists between your two variables of interest and therefore decide to run a regression.

Use an econometric package of your choice (EViews, SPSS, STATA etc) to estimate the model.
From the regression output, report the coefficients, standard errors, t-statistics, probability and R-squared (report the results in a table).
Re-write the specified model in (a) with values from the regression results and interpret the coefficients.

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