Suppose You Estimate the Following Regression of a Firm's Sales

question 1

Multiple Choice

Suppose you estimate the following regression of a firm's Sales and number of employees at each location across the country: Sales = 95,342 + 0.76 Number of Employees. You are willing to believe you have a random sample of store locations, and a sufficiently large sample size. Which statements are not yet justified by the regression results?

• A) On average a store with 100 employees is likely to have Sales of about = 95,342 + 0.76(100) = 95,418
• B) On average, stores with more sales have more employees.
• C) Increasing the number of employees at a store by 2 will raise sales by 0.76 × 2 = 1.52
• D) None of the answers is correct.

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