Question

with qudinitu IU 150 170 (2)The data below show aggregate consumption expenditure and disposable incofH 2010 2011 2012 2013 2014 2015 2016 124 128 140 148 Year Consumption Disposable Income (a)Write a regression model that relates both variables in both" general" and "specific forms". Brief explain why the specific form of the model is preferred. (b)Estimate the parameters of the model and write the results in standard form. (c)Interpret the estimated results 130 156 142 160 148 164 154 178 ffin tuhes at random from a very large shipment of tub

Answer 1

a) Consumption^ = a + b * Income

here consumption is dependent variable. Income is independent variable

as Income increase , we can say that consumption also increase

b)

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.955232099
R Square	0.912468363
Adjusted R Square	0.894962035
Standard Error	3.883999545
Observations	7
ANOVA
	df	SS	MS	F	Significance F
Regression	1	786.2870234	786.2870234	52.12220352	0.000795014
Residual	5	75.42726231	15.08545246
Total	6	861.7142857
	Coefficients	Standard Error	t Stat	P-value	Lower 95%
Intercept	-2.103092784	19.65877716	-0.106979837	0.918964876	-52.63758825
income	0.887743414	0.12296346	7.219570868	0.000795014	0.571655777

y^ = -2.1031 + 0.8877 *Income

c)

It means that on average if income increase by 1 unit , consumption increases by 0.8877 units

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