A Real Estate Analyst Believes That the Three Main Factors

question 89

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: Rent = β₀ + β₁ Bedroom + β₂ Bath + β₃Sqft + ε.The following table shows a portion of the regression results. When testing whether Bedroom is significant at the 5% significance level,she ___________________________________________________________________.

• A) rejects H₀:β₁ = 0,and concludes that the number of bedrooms significantly influences rent
• B) does not reject H₀:β₁ = 0,and concludes that the number of bedrooms significantly influences rent
• C) rejects H₀:β₁ = 0,and concludes that the number of bedrooms does not significantly influence rent
• D) does not reject H₀:β₁ = 0,and concludes that the number of bedrooms does not significantly influence rent

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Definitions:

Unemployment

Unemployment refers to the situation when individuals who are able and willing to work are not able to find employment.

Price Level

The mean of present prices for all goods and services produced within the economy.

Phillips Curve

An economic theory that proposes an inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Inflation Rate

The rate, expressed as a percentage, at which the overall cost of goods and services increases, leading to a decrease in purchasing power.