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?

Answer rating: 100% (QA)

Solution The given regression equation is Quantity 13 024 x Price 155 x GDP growth a Impact of a Dec... View the full answer