5. Personal Income The following table showsthe average annual income in the United States,adjusted for inflation, for the given year.25t=years since 1980I = annual income0$23,1095$23,11610$25,28415$26,59420$30,71925$30,35030$28,838a. Find the equation of the regression line.b. Plot the data along with the regression line.c. Explain in practical terms the meaning of theslope of the regression equation.d. During which year since 1990 was income muchlower than would be expected from the regres-sion model?

Step 1:Create a table like this Step 2:Solve using the formulas involved a) Regression equationFrom…

Answered: 5. Personal Income The following table…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The most common use of the CPI is as an economic Indicator to forecast Inflation and evaluate the effectiveness of government policies. Using the monthly CPI (seasonally adjusted) from January 2007 to May 2013, the estimated regression is: CPI-206+0.0346t, where t= 1, 2,...77 to represent the months in the series. Which statement below is true? O The Intercept is an estimate of CPI for 2013 O The Intercept is an estimate for the average value of CPI in January. O The estimate value of CPI In January 2007 is about 206.03 The Intercept is the value of CPI in January 2007.
The following table shows the average annual income in a certain country, adjusted for inflation, for the given year. t = years since 1980 I= annual income 0 $23,009 5 $23,016 10 $25,284 15 $26.494 20 $30,819 25 $30,350 30 $28,738 (a) Find the equation of the regression line. (Round regression line parameters to two decimal places.) I(t) = 62.48t+22810 x > (b) Plot the data along with the regression line.
A company sets different prices for a particular DVD system in eight different regions of the country. The accompanying table shows the numbers of units sold and the corresponding prices (in dollars). Sales 420 380 350 400 440 380 450 420 Price 104 195 148 204 96 256 141 109a. Graph these data, and estimate the linear regression of sales on price. b. What effect would you expect a $50 increase in price to have on sales?
d. If the director used these 4 weeks of data to create a linear regression, what does that linear regression formula suggest for this week's forecast of employee appointments? What does the regression analysis suggest in general about employee appointments for Director Very Busy?
15. Suppose that a researcher, using data on the number of years of education a person has received and their annual earnings from 150 individuals, estimates the OLS regression: where Earnings is measured in thousands of dollars. If the number of years of education a person receives increases by three, on average, the annual earnings of the individual would (1) by $ Note: Report answer in dollars. Suppose that Meghan wants to earn at least $65,000 annually and she has recently earned a Bachelor's degree in Economics, completing 16 years of education in total. She is considering whether she should pursue a Master's degree as well, which would involve studying for two more years. Which of the following statements is true? 00 Earnings = 40.68 + 1.46 Education, A. She could have reached her income target without a Bachelor's degree by receiving education for only 12 years. B. She is able to reach her income target with her current level of education. C. She will reach her income target…
a) Explain why fixed-weighted measures lead to substitution bias. b) Look at the following table. What is the base year? Year CPI Nominal Income Year CPI Nominal Income 1990 41.8 400 2003 107.6 45000 1991 44.4 650 2004 109.6 50000 1992 49.3 800 2005 113.6 55000 1993 53.8 2000 2006 118.3 65000 1994 56.9 5000 2007 124 70000 1995 60.6 9000 2008 130.7 85000 1996 65.2 12000 2009 136.2 90000 1997 72.6 15000 2010 140.3 105000 1998 82.7 19000 2011 144.5 115000 1999 90.9 22000 2012 148.2 125000 2000 96.5 28000 2013 152.4 132000 2001 99.6 32000 2014 156.9 137000 2002 103.9 35000 2015 160.5 150000 c) What is the real income in the year 2012 and 2013? d) What is the percentage change in CPI between years 2012 and 2013? e) What is the percentage change in Nominal Income between years 2012 and…
The seasonally adjusted data below depict the performance of the economy of the United States in five quarters of 1974-1975. Annual Percent Change Nominal GDP Annual Percent Change Real GDP Year/Quarter 1974/Q1 4.1 -3.4 1974/02 10.8 1.0 1974/03 8.1 -3.7 1974/04 10.6 -1.5 1975/01 4.2 -4.8 The inflation rate in the United States was lowest in which of the following quarters? Select one: OA 1974/Q1. O B. 1974/Q2. OC. 1974/Q3. OD. 1974/Q4. OE 1975/Q1.
Provide a trend analysis for income taxes ratios. What does it mean when a company's income taxes ratios increase over the years?
You are employed by the state bureau of economic development. There is a demand for a leading economic index to review past economic activity and to forecast future economic trends in the state. You decide that several key factors should be included in the index: number of new businesses started during the year, number of business failures, state income tax receipts, college enrollment, and the state sales tax receipts. Here are the data for 2000 and 2018. 2000 2018 New businesses 1,240 1,325 Business failures 600 496 State income tax receipts ($ millions) 185.2 220.8 College student enrollment 242,299 291,291 State sales tax ($ millions) 55.1 57.4 The weights you assign are: new businesses 15%, business failures 10%, income tax 42%, enrollment 13% and sales tax 20%. b. Compute the leading economic indicator for 2018. (Round your answer to 2 decimal places.) c. Interpret the indexes. (Round your answer to 2 decimal places.) Economic activity has (increased or decreased) _____%…
Q3. You are working as a researcher in an economic Institute, you want to study the relation between the Unit sales as a Dependent variable and the following independent variables (selling expenditure, advertising, competitive price) As shown in the following model Unit Sales + = b0+b1 Exp + + b2 Adv t b3 t+ compt + Ut After collecting your data, and estimating your linear regression over the data, you got the following regression equation comp t Unit Sales t = -10.5 - 0.51 Exp + + 0.09 Adv 3.05 b3 t + (2.45) (-1.5) t- value (4.2) (2.94) R² = 0.24 F- Value 0.33 ' 1- What is the economic meaning of the coefficient b0 (-10.5) 2- Describe the meaning of R² and its value, F - Value 3- What do you think about the Model as a whole, with F, R2 values....is it significant or not ....explain your answer
Consider the following national income model : Y = C + I + Go C = 102 + 0.6Y 3.3000000000000003I = 253 + 0.21Y Where Go = 184 (i) Identify the exogenous variable/s. if there are more than one variable, separate each variable with a comma Convert this system of equations in matrix form. (ii) What is the determinant of the coefficient matrix? (Give your answer to 'three' decimal places, if possible) (Note: you can use either inversion or Cramer's rule to find the values of Y, C, and I.) (iii) What is the equilibrium value of Y? (Give your answer to 'three' decimal places, if possible) (iv) What is the equilibrium value of C? (Give your answer to 'three' decimal places, if possible) (v) What is the equilibrium value of I? (Give your answer to 'three' decimal places, if possible)
The following graph shows the relationship between real GDP growth and change in unemployment for the US between 1961 and 2013. US (1961-2013) Change in unemployment rate (%) 6 4 6 2009 -1 0 y=-0.3768x+1.2298 R=0.641 4 Real GDP growth (%) The equation shown is the regression result for the best-fitting line. Based on this information, which of the following statements is correct? 9 a) With real GDP falling by 2.8% in 2009, the predicted rise in the unemployment rate would have been 2.3% b) From the regression result, policy makers can be sure that a 1 percentage point increase in real GDP next year will definitely lead to a fall in the unemployment rate of 0.38%. Oc) The unemployment rate remains stable when there is zero real GDP growth. d) Okun's coefficient for the US is 1.2298

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