TAKE HOME QUIZ 1: Demand Estimation and Forecasting Multiple !

"oice Questions 1) Regression analysis can best be described as: A) a statistical technique for estimating the best relationship between one variable and a set of other selected variables. B) a statistical technique for determining the true values of variables. C) a statistical technique for creating functional relationships among variables. ) !one of the above. ") #f a regression coefficient passes the t$test% it means that: A) the regression equation is valid. B) the regression coefficient is significantly different from &ero. C) the regression coefficient can be used for forecasting. ) the regression coefficient should be included in the regression equation. ') (hich of the following is a test of the statistical significance of the entire regression equation) A) t$test B) R" C) *$test ) urbin$(atson test +) (hich of the following is a test of the statistical significance of a particular regression coefficient) A) t$test B) R" C) *$test ) urbin$(atson test

,) (hich of the following is a measure of the e-planatory power of the regression model) A) t$test B) R" C) *$test ) urbin$(atson test .) (hen the R" of a regression equation is very high% it indicates that: A) all the coefficients are statistically significant. B) the intercept term has no economic meaning. C) a high proportion of the variation in the dependent variable can be accounted for by the variation in the independent variables. ) there is a good chance of serial correlation and so the equation must be discarded. /) (hich indicator shows how well a regression line fits through the scatter of data points) A) *$test B) R" C) t$test ) urbin$(atson test

0) (hen a regression coefficient is significant at the .1, level% it means that: A) there is only a five percent chance that there will be an error in a forecast. B) there is 2, percent chance that the regression coefficient is the true population coefficient. C) there is a five percent chance or less that the estimated coefficient is &ero. ) there is a five percent chance or less that the regression coefficient is not the true population coefficient. 2) 3he t$test is a statistical measure which: A) tests the true value of a variable. B) tests the statistical significance of a regression coefficient. C) tests the statistical significance of a regression equation. ) !one of the above. 11) 3he t$statistic is computed by: A) dividing the regression coefficient by the standard error of the estimate. B) dividing the regression coefficient by the standard error of the coefficient. C) dividing the standard error of the coefficient by the regression coefficient. ) dividing the R" by the *$statistic. 11) 3he *$test is used to determine if: A) a regression coefficient is significant. B) multicollinearity e-ists. C) a regression equation significantly accounts for the variation in the value of a dependent variable. ) an identification problem is present. 1") *or the regression equation 4 5 111 $ 1161 7 ",6"% which of the following statements is true) A) 6" is the more important variable because it is positive. B) (hen 61 decreases by one unit% 4 decreases by 11 units. C) (hen 61 increases by 11 units% 4 decreases by 1 unit. ) (hen 61 increases by one unit% 4 decreases by 11 units. 1') (hen using regression analysis for forecasting% the confidence interval indicates: A) the degree of confidence that one has in the equation8s R". B) the range in which the value of the dependent variable is e-pected to lie with a given

degree of probability. C) the degree of confidence that one has in the regression coefficients. ) the range in which the actual outcome of a forecast is going to lie. 1+) 3he use of a dummy variable in regression analysis: A) indicates that a researcher does not really 9now what to include in the equation. B) indicates that a variable is e-pected to either have or not have an impact on a dependent variable. C) indicates that insufficient data is available for the analysis. ) indicates the use of hypothetical data. 1,) #n using regression analysis to estimate demand% which of the following problems is most directly a result of insufficient data) A) the identification problem B) the problem of a low R" C) the problem of high standard errors ) the problem of insignificant *$statistics 1.) (hich of the following refers to a relatively high correlation among the independent variables of a regression equation) A) autocorrelation B) the identity problem C) statistically insignificant regression coefficients ) multicollinearity 1/) A manager will have the least confidence in an e-planatory variable that: A) does not pass the *$test. B) is e-pressed as a dummy variable. C) does not pass the t$test. ) constitutes only a small part of R". 10) *rom a management policy perspective% which regression result is the most useful) A) a regression equation that passes the *$test B) a regression equation whose e-planatory variables all pass the t$test C) a regression equation that has the highest R" ) a regression equation that has the least number of dummy variables 12) (hich of the following is a leading economic indicator) A) average hours% manufacturing B) money supply :" C) stoc9 prices% ,11 common stoc9s ) All of the above. "1) An e-planatory forecasting technique in which the analyst must select independent variables that help determine the dependent variable is called: A) e-ponential smoothing. B) regression analysis.

C) trend analysis. Anal#tical Question

) moving average method.

3he following are the sales achieved by ;ensen *abrics during the last / years: 122' <11.%111 122+ 1"+%111 122, 1"/%111 122. 1+.%111 122/ 1,,%111 1220 1,+%111 1222 1."%111 =sing the compound growth rate calculation% what would be your estimate for sales in "111) Reference: Chapter , $ emand >stimation and *orecasting ?eat% @aul and @hilip ?.A. Aoung B"11'). :anagerial >conomics: >conomic 3ools for 3odayCs ecision :a9ers.