A Regression Model Between Sales (Y in $1000), Unit Price

question 101

Multiple Choice

A regression model between sales (y in $1000) , unit price (x₁ in dollars) , and television advertisement (x₂ in dollars) resulted in the following function: ​ = 8 - 4x₁ + 5x₂
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For this model, SSR = 3500, SSE = 1500, and the sample size is 20.The coefficient of x₂ indicates that if television advertisement is increased by $1 (holding the unit price constant) , sales are expected to

• A) increase by $5.
• B) increase by $20,000.
• C) increase by $5000.
• D) decrease by $4000.

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Definitions:

Semi-annually Compounded

Relating to the process in which the interest on a loan or investment is calculated and added to the principal amount twice a year.

Effective Annual Rate

A measure of the true interest rate accounting for the effects of compounding over a year.

Contributions

Amounts given or donated to a particular cause, project, or for a retirement account.

Effective Rate of Return

A measure of the return on an investment that accounts for the effect of compounding over a specified time period.