Question: Consider the output of a regression analysis shown below. Quantity = 13 0.24*Price + 1.55*GDP growth Note that GDP growth is expressed in percent

Consider the output of a regression analysis shown below. Quantity = 13 — 0.24*Price + 1.55*GDP growth

Note that GDP growth is expressed in percent form (1.5, 0.5), not decimal form (0.015, 0.005).

a. How would a decline of GDP growth from 1.5 percent to 0.5 percent affect demand? Assume price remains unchanged at $10. Show how you calculated your answer.

b. Is this a change in quantity demanded or a change in demand?

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