Question

Three independent variables were selected as predictors of sales (in dollars): regional population (x1), per capita income (x2), and regional unemployment rate (x3). The following equation was developed:

Answer 1

A. This is an example of A. Multiple regression equation

B. The number, 64,100 can be interpreted to be C. y-intercept.

C. The number of monthly sales for a particular region with a population of 796,000, per capita income of $6,940, and an unemployment rate of 6.0% is $374, 748

What the equation represents

The equation given represents a multiple regression equation and we know this because a multiple regression equation shows the relationship between different independent variables and a dependent variable.

The first value in the multiple regression equation is the y-intercept. So, for the monthly sales of a region with a population of 796,000, the value to be obtained would be $374, 748

y = 64,1000 + 0.394(796,000) + 9.6(6940) - 11,600(6.0)

= $374, 748