TABLE 14-3
an Economist Is Interested to See How Consumption

question 12

Multiple Choice

TABLE 14-3
An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($ billions) and aggregate price (consumer price index) . The Microsoft Excel output of this regression is partially reproduced below.
$$\begin{array}{l}\text { SUMMARY OUTPUT }\\\begin{array} { l c } \hline { \text { Regression Statistics } } \\\hline \text { Multiple R } & 0.991 \\\text { R Square } & 0.982 \\\text { Adjusted R Square}&0.976 \\\text { Standard Error } & 0.299 \\\text { Observations } & 10\end{array}\end{array}$$
ANOVA
$\begin{array}{lcccccc}\hline & d f & S S & \text { MS } & F & \text { Significance } F \\\hline \text { Regression } & 2 & 33.4163 & 16.7082 & 186.325 & 0.0001 \\ \text { Residual } & 7 & 0.6277 & 0.0897 & & \\\text { Total } & 9 & 34.0440 & & & &\end{array}$
$$\begin{array} { l c c c c } &\text { Coeffieients } & \text { Standard Error }& t \text { Stut } & p \text {-value } & \\\hline \text { Intercept } & - 0.0861 & 0.5674 & - 0.152 & 0.8837 \\\text { GDP } & 0.7654 & 0.0574 & 13.340 & 0.0001 \\\text { Price } & - 0.0006 & 0.0028 & - 0.219 & 0.8330\end{array}$$
-Referring to Table 14-3, what is the predicted consumption level for an economy with GDP equal to $4 billion and an aggregate price index of 150?

• A) $4.75 billion
• B) $1.39 billion
• C) $2.89 billion
• D) $9.45 billion

---

Definitions:

Collective Behavior

Actions and expressions that emerge spontaneously from a group of people in situations that are unstructured, uncertain, or out of the social norm.

Breakdown Theory

A sociological theory suggesting that social movements and collective action arise from the breakdown of traditional social structures and norms.

Riot

A form of civil disorder characterized by a group lashing out in a violent public disturbance against authority, property, or people.

Lynching

The act of killing someone, usually by hanging, without legal trial, often associated with racial violence and mob justice.