A Real Estate Analyst Believes That the Three Main Factors

question 86

Multiple Choice

A real estate analyst believes that the three main factors that influence an apartment's rent in a college town are the number of bedrooms, the number of bathrooms, and the apartment's square footage. For 40 apartments, she collects data on the rent (y, in $) , the number of bedrooms (x₁) , the number of bathrooms (x₂) , and its square footage (x₃) . She estimates the following model as Rent = β₀ + β₁Bedroom + β₂Bath + β₃Sqft + ε. The following ANOVA table shows a portion of the regression results. Which of the following would be the rent for a 1,000-square-foot apartment that has two bedrooms and two bathrooms?

• A) $840
• B) $1,130
• C) $1,260
• D) $1,335

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Definitions:

Expenditure

The action of spending funds or the amount of money spent on goods, services, or other expenses.

Gross Domestic Product

The total market value of all finished goods and services produced within a country's borders in a given time period, reflecting the overall economic health.

GDP Deflator

An economic metric that converts the nominal Gross Domestic Product into Real GDP by adjusting for price level changes, representing the price inflation or deflation within an economy.

Inflation Rate

The annual rate at which the cost of goods and services in an economy rises, representing a general upward trend in prices over time.