Assume That You Have Collected a Sample of Observations from Over

question 8

Multiple Choice

Assume that you have collected a sample of observations from over 100 households and their consumption and income patterns. Using these observations, you estimate the following regression C_i = ?₀+?₁Y_i+ u_i where C is consumption and Y is disposable income. The estimate of ?₁ will tell you

• A) \(\frac { \Delta \text {Income } } { \Delta \text { Consumption } }\)
• B)The amount you need to consume to survive
• C) \(\frac { \text { Income } } { \text { Consumption } }\)
• D) \(\frac { \Delta \text { Consumption } } { \Delta \text { Income } }\)

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