TABLE 15-1
to Explain Personal Consumption (CONS) Measured in Dollars $\text {INC: personal income indollars}$

question 84

Multiple Choice

TABLE 15-1
To explain personal consumption (CONS) measured in dollars, data is collected for
$\text {INC: personal income indollars}$
$\quad$$\quad$$\text {CRDTLIM: \( \$ 1 \) plus the credit limit in dollars}$
$\quad$$\quad$$\text { available to the individual }$
$\quad$$\quad$$\text {APR: average annualized percentage interest rate for}$
$\quad$$\text { borrowing for the individual}$

$\text {ADVT: perperson advertisingexpenditure}$
$\quad$$\quad$$\quad$$\text { in dollars by manufacturers in the}$
$\quad$$\quad$$\quad$ $\text {city where the individual lives}$

$\text { SEX: gender of the individual: 1 if female, 0 if male}$

A regression analysis was performed with CONS as the dependent variable and ln(CRDTLIM) , ln(APR) , ln(ADVT) , and SEX as the independent variables. The estimated model was
y^{^} = 2.28 - 0.29 ln(CRDTLIM) + 5.77 ln(APR) + 2.35 ln(ADVT) + 0.39 SEX

-Referring to Table 15-1, what is the correct interpretation for the estimated coefficient for ADVT?

• A) A $1 increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of $2.35 on personal consumption holding other variables constant.
• B) A 1% increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of 2.35% on personal consumption holding other variables constant.
• C) A 100% increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of 2.35% on personal consumption holding other variables constant.
• D) A 100% increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of $2.35 on personal consumption holding other variables constant.

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Definitions:

Gen-Xers

Individuals born approximately between the early 1960s and early 1980s, characterized by specific cultural or social traits distinctive of their generation.

Age Grade

A social category or class that groups individuals within a community based on their age, often marking significant stages in one's life with specific rights and obligations.

Age Set

A social system where individuals within a specific age group, often born within a certain range of years, share common rights, duties, and identity.

Closed-Class Societies

Societies with rigid social structures that limit upward mobility and social movement between classes.