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

question 230

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, when the economist used a simple linear regression model with consumption as the dependent variable and GDP as the independent variable, he obtained an r² 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

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