SCENARIO 13-3 an Economist Is Interested to See How Consumption for an for an Economy

question 6

Multiple Choice

SCENARIO 13-3
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.
-Referring to SCENARIO 13-3, what is the estimated mean consumption level for an economy with GDP equal to $2 billion and an aggregate price index of 90?

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

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Definitions:

Compounded Quarterly

The process where interest on an investment is calculated and added to the principal every three months, contributing to the growth of the investment amount.

Compounded Monthly

Entails the regular addition of interest to the principal balance of a loan or deposit every month, affecting overall returns or costs.

Semi-monthly Payments

Payments that are made twice a month, often on the 1st and 15th, typically in the context of salaries or loans.

Loan to Value Ratio

A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.