Question: Fundamental Forecasting Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro eurot=b0+b1INFt1+b2INCt1=.005+1.2INFt1+0.7INCt1 where euro t is the

Fundamental Forecasting Sulsa Inc. uses fundamental forecasting. Using regression analysis, it

Fundamental Forecasting Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro eurot=b0+b1INFt1+b2INCt1=.005+1.2INFt1+0.7INCt1 where euro t is the quarterly change in euro's value, INF Ft1 is the previous quarterly percentage change in the inflation differential, and INCt1 is the previous quarterly percentage change in the income growth differential. The most recent quarterly percentage change in the inflation differential between the U.S. and Europe was 2 percent, while the most recent quarterly percentage change in the income growth 1 differential between the U.S. and Europe was 1 percent. Based on this information, what is the forecast of the percentage change in euro's value? ( 1 point)

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