Consider the Following to Answer the Question(s) Below

question 3

Multiple Choice

Consider the following to answer the question(s) below:
A regression was performed to predict the selling price of a yacht in thousands of dollars based on the number of rooms it had, its age (years) , and its length (feet) . The R2 is 68.45%. The equation is given here.
Selling Price = 120.51 + 7.46 Rooms - 1.78 Age + 2.83 Length
-What does the coefficient of Rooms mean in the context of the regression model?

• A) The average selling price will increase by $7,460 for every additional room for yachts with the same length and age.
• B) The average selling price will increase 7.46 times for every additional room.
• C) Every additional room will mean the selling price will increase by 7.46%, all other things being equal.
• D) There is always a decrease in selling price of $7,460 for every additional room on a yacht.
• E) The number of rooms is the most important explanatory variable since it is the largest.

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Definitions:

Rate of Interest

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.

Households

Units in an economy consisting of one or more people who live in the same dwelling and share meals or living accommodation, and may consist of a single family or some other grouping of people.

Aggregate Demand

Cumulative need for every type of good and service in an economy, observed at a consistent overall price point across a chosen period.

Money Supply

The total economic monetary resources present at a specific time.