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

question 204

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 $3 billion, a GDP of $3.5 billion, and an aggregate price level of 125. What is the residual for this data point?

• A) $2.52 billion
• B) $0.48 billion
• C) -$1.33 billion
• D) -$2.52 billion

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Definitions:

Psychological Egoism

The theory that suggests that all human actions are motivated by self-interest, even in what seem to be acts of altruism.

Altruism

The selfless concern for the well-being of others, often leading to acts of kindness without expectation of reward.

Ethical Egoism

A moral philosophy suggesting that actions are morally right if they benefit the self of the individual performing them.

Abraham Lincoln

The 16th President of the United States, known for leading the country during the Civil War and abolishing slavery.