SCENARIO 13-3
An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($ billions) and aggregate price (consumer price index).The Microsoft Excel output of this regression is partially reproduced below.
-Referring to SCENARIO 13-3, one economy in the sample had an aggregate consumption level of $3 billion, a GDP of $3.5 billion, and an aggregate price level of 125.What is the residual for this data point?
A)$2.52 billion
B)$0.48 billion
C)- $1.33 billion
D)- $2.52 billion

Question

SCENARIO 13-3
An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($ billions) and aggregate price (consumer price index).The Microsoft Excel output of this regression is partially reproduced below. 
-Referring to SCENARIO 13-3, one economy in the sample had an aggregate consumption level of $3 billion, a GDP of $3.5 billion, and an aggregate price level of 125.What is the residual for this data point?
A)$2.52 billion 
B)$0.48 billion 
C)- $1.33 billion 
D)- $2.52 billion

Quizplus · Accepted Answer

The residual is the difference between the actual consumption and the predicted consumption. The predicted consumption can be calculated using the regression equation provided in the scenario. Without the specific regression equation details from the scenario, we can't calculate the exact residual here. However, the correct choice is based on the information that would have been given in the scenario, which typically involves applying the regression coefficients to the given variables (GDP, price level) to predict consumption, and then subtracting the actual consumption ($3 billion) from this predicted value to find the residual.

SCENARIO 13-3 an Economist Is Interested to See How Consumption for an for an Economy