Economics and Management
The following questions refer to this regression equation. (Standard errors in parentheses.)
QD = 15,000 - 10 P + 1500 A + 4 PX + 2 I, (5,234) (2.29) (525) (1.75) (1.5)
R2 = 0.65
N = 120
F = 35.25
Standard error of Y estimate = 565
Q = Quantity demanded
P = Price = 7,000
A = Advertising expense, in thousands = 54
PX = price of competitor's product = 8,000
I = average monthly income =4,000
2) How is the R2 value calculated, and what information does this give you?
3) When would you use a one-tailed rather than a two-tailed t-test when checking significance levels?
4) What is multicollinearity? In general, how would you know if you had a problem with multicollinearity, and how could you correct it?
7) Explain the difference between Cross-Section and Time-Series Regression Analysis.