TABLE 14-5
a Microeconomist Wants to Determine How Corporate Sales

question 80

Multiple Choice

TABLE 14-5
A microeconomist wants to determine how corporate sales are influenced by capital and wage spending by companies. She proceeds to randomly select 26 large corporations and record information in millions of dollars. The Microsoft Excel output below shows results of this multiple regression.
$$\begin{array}{l}\text { Regression Statistics }\\\begin{array} { l r } \hline \text { Multiple R } & 0.830 \\\text { R Square } & 0.689 \\\text { Adjusted R Square } & 0.662 \\\text { Standard Error } & 17501.643 \\\text { Observations } & 26\end{array}\end{array}$$

ANOVA
$\begin{array}{lcrrrr}\hline & \text { d f }&\text { S S } & \text { M S } & \text { F }&\text { Significance F } \\\hline \text {Regression} & 2 & 15579777040 & 7789888520 & 25.432 & 0.0001 \\\text {Residual }& 23 & 7045072780 & 306307512 & & \\\text {Total }& 25 & 22624849820 & & & \\\hline\end{array}$

$$\begin{array} { l c c c c } & \text { Coefficients } & \text { Standard Error} & \text { t Stat } & \text { p-value } \\\text { Intercept } & 15800.0000 & 6038.2999 & 2.617 & 0.0154 \\\text { C apital } & 0.1245 & 0.2045 & 0.609 & 0.5485 \\\text { W ages } & 7.0762 & 1.4729 & 4.804 & 0.0001 \\\hline\end{array}$$

-Referring to Table 14-5, what fraction of the variability in sales is explained by spending on capital and wages?

• A) 83.0%
• B) 27.0%
• C) 68.9%
• D) 50.9%

---

Definitions:

Whiskey Ring

A scandal in the 1870s involving government officials and distillers in the United States to defraud the government of taxes on whiskey.

Ulysses Grant

The 18th President of the United States (1869-1877) and a prominent Union general during the American Civil War, known for his leadership and efforts to reunify the nation.