Exercise 2.3 The following table shows hypothetical consumption spending by households and income of households in billions of dollars. Year 2006 2007 2008 2009 2010 2011 2012 2013 Income 476 482 495 505 525 539 550 567 Consumption 434 447 454 471 489 509 530 548 (a) Plot the scatter diagram with consumption on the vertical axis and income on the horizontal axis. (b) Fit a line through these points. (e) Does the line indicate that these two variables are related to each other? (d) How would you describe the causal relationship between income and consumption?

Exercise 2.3 The following table shows hypothetical consumption spending by households and income of households in billions of dollars. Year 2006 2007 2008 2009 2010 2011 2012 2013 Income 476 482 495 505 525 539 550 567 Consumption 434 447 454 471 489 509 530 548 (a) Plot the scatter diagram with consumption on the vertical axis and income on the horizontal axis. (b) Fit a line through these points. (e) Does the line indicate that these two variables are related to each other? (d) How would you describe the causal relationship between income and consumption?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Exercise 2.3 The following table shows hypothetical consumption spending by households and
income of households in billions of dollars.
Year
2006
2007
2008
2009
2010
2011
2012
2013
Income
476
482
495
505
525
539
550
567
Consumption
434
447
454
471
489
509
530
548
(a) Plot the scatter diagram with consumption on the vertical axis and income on the horizontal
axis.
(b) Fit a line through these points.
(e) Does the line indicate that these two variables are related to each other?
(d) How would you describe the causal relationship between income and consumption?

Exercise 2.3 The following table shows
hypothetical consumption spending by
households and ncome of households in
billions of dollars. \table[[Year,
Income,Consumption
], [2006, 476, 434], [2007, 482, 447], [2008, 495, 454], [2009,
a) Plot the scatter diagram with
consumption on the vertical axis and
income on the horizontal (b) Fit a line
through these points. (c) Does the line
indicate that these two variables are
related to each other

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