TABLE 14-3 an Economist Is Interested to See How Consumption for an for an Economy

question 129

Multiple Choice

TABLE 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 Table 14-3, one economy in the sample had an aggregate consumption level of $4 billion, a GDP of $6 billion, and an aggregate price level of 200. What is the residual for this data point?

• A) $4.39 billion
• B) $0.39 billion
• C) -$0.39 billion
• D) -$1.33 billion

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Definitions:

Responsibility Centers

Responsibility centers refer to segments within an organization for which individual managers are accountable, focusing on revenue, cost, profit, or investment.

Controllable Cost

A cost over which a manager has control.

Actual Cost

The actual expense incurred to acquire an asset or service, including all costs necessary to bring the asset into use or to complete the service.

Responsibility Accounting

A system of accounting that segments financial information by areas of responsibility within an organization, aiding in budgeting and performance evaluation.