Question #136

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

Page: 67

Status: Unattempted

Correct Answer: A

Part of Context Group: Q136-139 First in Group
Shared Context
- Using the regression model developed, the closest prediction of sales for December 20X6 is: A) $55,000. B) $44,000. C) $36,000.
Question
Will Jack conclude that the housing starts coefficient is statistically different from zero and how will he interpret it at the 5% significance level?
Answer Choices:
A. Different from zero; sales will rise by $100 for every 23 house starts
B. Different from zero; sales will rise by $23 for every 100 house starts
C. Not different from zero; sales will rise by $0 for every 100 house starts
Explanation
A p-value (0.017) below significance (0.05) indicates a variable that is statistically different from zero. The coefficient of 0.23 indicates that sales will rise by $23 for every 100 house starts. Remember the rule p-value < significance, then reject null.
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