SCENARIO 14-3
an Economist Is Interested to See How Consumption $r ^ { 2 }$

question 8

Multiple Choice

SCENARIO 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.
-Referring to Scenario 14-3, when the economist used a simple linear regression model with consumption as the dependent variable and GDP as the independent variable, he obtained an $r ^ { 2 }$ value of 0.971. What additional percentage of the total variation of consumption has been
Explained by including aggregate prices in the multiple regression?

• A) 98.2
• B) 11.1
• C) 2.8
• D) 1.1