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# Four different brokerage houses were asked for stocks earnings forecasts for the next year for ve different corporations. The brokerage houses asked...

Four different brokerage houses were asked for stocks earnings forecasts for the next year for
ﬁve different corporations. The brokerage houses asked the analysts on staff who had experience with the corporations in question. Four analysts were surveyed at each brokerage house. Sorne
descriptive statistics are listed below: Source of Variation Sum oquuarss
Between brokerage houses 240.3
Between stocks ’ earnings 122.5
forecasts Interaction 20.3
Error 325.3

Complete the ANOVA table
Amicro eeonomistwantstodeterminehowoorporate salls areinﬂueneedby capitalandwage. She colleetthedata
and produced the following regression output (Table 1) Reression Ana is —
—E—_
—El—_
—Std. Emor —1?501.64 De_ Var. m
—— ANOVA table ——_ Source - verve
Residual ——_ Total 22624849820 25
Regression out ut variables coeﬁ'rcients std. error t[’df=28) pvalue
Intercept 15800 60382999 2.61? .0154 Capital 0.1245 0-2045 0-609 0.5485 Wages 7.0762 1.4729 4-804 0.0001 — Explain tb‘meaniug of gin coefﬁcient, do their signs conform the economic theory? — What fraction of the variability in sales is explained by spending on capital and wages? — Which of the independent variables in the model are individually signiﬁcant at the 5% level? — At the 0.01 level of signiﬁcance, what conclusion should the micro economist draw regarding the inclusion of
Capital in the regression model? — When the micro economist used a simple linear regression model with sales as the dependent variable and wages
as the independent variable, he obtained anR—square value of0-601. What additional percentage ofthe total
variation of sales has been explained by including capital spending in the multiple regression? — If X1 is capital andXZ is wages, the least squares multiple regression equation for this problem is (Y is sales)
—‘What is the predicted sales (in millions of dollars) for a company spending \$100 million on capital and \$100
million on wages?

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