Problems Note: Most of the following problems contain data that are to be manipu

Question

Problems Note: Most of the following problems contain data that are to be manipulated using regression analysis procedures. Although it is possible even useful, to work one or two of these by hand, it is important for you to learn how to use computer software to solve such problems. the next chapter you will learn about mukiple regression In hand. You should become analysis in which it is not feasible to solve the problems by you familiar with regression analysis software while solving the following problems If have access to Minitab or Excel, see the section at the end of this chapter for instruc- tions on their use MacBook Air

Explanation / Answer

Part (a)

In the regression equation, Y = 0.078 + 0.06X, slope is represented by 0.06 and y-intercept by 0.078.

Slope represents the change in Y per unit change in X.

In the given case, a slope of 0.06 would mean an expected increase [because of positive value] of 0.06 billion dollars in AT&T earning for every increase of 1 billion dollar in GNP. In other words, when GNP is up by 1 billion dollars, AT&T earning is exoected to go up by 600 million dollars.

Part (b)

y-intercept is the value of Y when X = 0. In the current case, y-intercept of 0.078 would mean that AT&T earning is expected to be 78 million dollars in the hypothetical case of zero GNP.

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