THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 90

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A market researcher is interested in the average amount of money spent per year by college students on clothing.From 25 years of annual data,the following estimated regression was obtained through least squares:
y_t = 48.75 +
+
+
where the numbers in parentheses below the coefficients are the coefficient standard errors,and
y = Expenditure per student,in dollars,on clothes
x₁ = Disposable income per student,in dollars,after the payment of tuition,fees,and room and board.
x₂ = Index of advertising,aimed at the student market,on clothes
-With advertising held fixed,what would be the expected impact over time of a $1 increase in disposable income per student on clothing expenditure?

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Definitions:

Business Organization

A legally recognized entity established to conduct commercial activities, ranging from sole proprietorships to corporations.

Advantage

The condition of being in a favorable or superior position relative to competitors or alternatives.

Treasury Stock

Shares initially part of the company's outstanding shares that have been repurchased by the company.

Par Value

Par value is the nominal or face value of a bond, share of stock, or a coupon as stated by the issuer.