If You Are Comfortable with Assumptions Required for Causal Analysis

question 5

Multiple Choice

If you are comfortable with assumptions required for causal analysis and you have estimated the relationship between Sales and running a promotion together with a price discount to be Sales_i = 140.3(60) + 4.3(0.7) Promo with standard errors reported in parenthesis. What would you predict to occur in the event of running a discount next week?

• A) That it will increase sales, but you cannot reject the null hypothesis that it won't have any effect at the 90% confidence level.
• B) That it will decrease sales, and that this has support at the 90% confidence level.
• C) That it will increase sales by 4.3, and you are 90% confident that Promotions have some effect on Sales.
• D) You are 90% confident that it will increase sales by 4.3.

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