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Sulsa IncUses Fundamental Forecasting  euro t=b0+bINtt1+b2INCt1=.005+.9INFt1+1.1INCt1 \begin{aligned} \text { euro }_{t} &=b_{0}+b I N t_{t-1}+b_{2} I N C_{t-1} \\ &=.005+.9 I N F_{t-1}+1.1 I N C_{t-1} \end{aligned}

question 17

Multiple Choice

Sulsa Inc.uses fundamental forecasting.Using regression analysis,it has determined the following equation for the euro:
 euro t=b0+bINtt1+b2INCt1=.005+.9INFt1+1.1INCt1 \begin{aligned} \text { euro }_{t} &=b_{0}+b I N t_{t-1}+b_{2} I N C_{t-1} \\ &=.005+.9 I N F_{t-1}+1.1 I N C_{t-1} \end{aligned}
The most recent quarterly percentage change in the inflation differential between the U.S.and Europe was 2 percent,while the most recent quarterly percentage change in the income growth differential between the U.S.and Europe was -1 percent.Based on this information,the forecast for the euro is a(n) __________ of _______%.

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Definitions:

Seller

An individual or entity that offers goods or services in exchange for monetary compensation or other benefits.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period of time.

Total Revenue

The total income received by a firm from the sale of its products or services.

Price

Price is the amount of money expected, required, or given in payment for something, reflecting its value in terms of currency.

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