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13.29 A multinational corporation completed an analysis to model weekly sales, in dollars, versus average production work hours per week. To present their work to pundits in Germany they must convert the currency to the euro: 1 euro equaled $1.20 at the time of the analysis. (a) Explain the impact, if any, the change of currency will have on bi. ? (b) Explain the impact, if any, the change of currency will have on r

Answer 1

(A) will change dollar coefficient by a scale of 1.20

This will happen because, when currency was in dollar , any change in production hours per week would change weekly sales in dollars by b1 but when we change the currency, change would not be b1, it will be affected by a scale of 1.20 which is the conversion factor.

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(C) No effect

Correlation coefficient remains unaffected because the degree of correlation has nothing to do with units being used.