To Explain Personal Consumption (CONS) Measured in Dollars, Data Is $\quad$

question 253

Multiple Choice

To explain personal consumption (CONS) measured in dollars, data is collected for
INC: $\quad$ $\quad$ $\quad$ personal income in dollars
CRDTLIM: $\quad$ $1 plus the credit limit in dollars available to the individual
APR: $\quad$ $\quad$ $\quad$ average annualized percentage interest rate for borrowing for the individual
ADVT: $\quad$ $\quad$ per person advertising expenditure in dollars by manufacturers in the city where the individual lives
SEX: $\quad$ $\quad$ $\quad$ 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

What is the correct interpretation for the estimated coefficient for SEX?

• A) Holding everything else fixed, personal consumption for males is estimated to be 0.39% higher than females on the average.
• B) Holding everything else fixed, personal consumption for females is estimated to be 0.39% higher than males on the average.
• C) Holding everything else fixed, personal consumption for females is estimated to be $0.39 higher than males on the average.
• D) Holding everything else fixed, personal consumption for males is estimated to be $0.39 higher than females on the average.

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Definitions:

Provision for Bad Debts

An accounting concept that represents an allowance for receivables that may not be collectible.

Uncollectible and Reduced Accounts

Refers to accounts receivable that a business deems unlikely to be collected and therefore reduces their value on the financial statements.

Donor Retains Power

In charitable giving, when the donor ensures some level of continued influence or control over the use or investment of the donated assets.

Not-For-Profit Accounting

Not-For-Profit Accounting encompasses the principles and practices used by nonprofit organizations to record and report their financial activities, focusing on accountability and fund management rather than profitability.