3. Do consumption and income appear to have a high, moderate, or low correlation? 4. Now you will estimate the slope and intercept. Fill in the table to start. Income (x) Cons (yi) (xi - x) (yi− ỹ) (xi − x)(yi − ỹ) (x¡ − x)² 9 7 1 1 1 1 11 7 3 1 3 9 5 2 -3 -4 12 9 8 7 0 1 0 0 2 2 -6 -4 24 36 9 8 12 9 In macroeconomics, the marginal propensity to consume (MPC) is the proportion of extra income that is spent on consumption, and it is important for determining the effects of monetary and fiscal policy. In this exercise, you will estimate the MPC with the slope from regression analysis. 1. Your two variables are consumption and income. Which is the dependent variable and which is the independent variable? 2. You have the following data on consumption and income (in $10,000s). Income Consumption 7 9 11 5 8 2 9 12 7 2 7 2 8 9 Make a scatterplot and draw the line of best fit.
3. Do consumption and income appear to have a high, moderate, or low correlation? 4. Now you will estimate the slope and intercept. Fill in the table to start. Income (x) Cons (yi) (xi - x) (yi− ỹ) (xi − x)(yi − ỹ) (x¡ − x)² 9 7 1 1 1 1 11 7 3 1 3 9 5 2 -3 -4 12 9 8 7 0 1 0 0 2 2 -6 -4 24 36 9 8 12 9 In macroeconomics, the marginal propensity to consume (MPC) is the proportion of extra income that is spent on consumption, and it is important for determining the effects of monetary and fiscal policy. In this exercise, you will estimate the MPC with the slope from regression analysis. 1. Your two variables are consumption and income. Which is the dependent variable and which is the independent variable? 2. You have the following data on consumption and income (in $10,000s). Income Consumption 7 9 11 5 8 2 9 12 7 2 7 2 8 9 Make a scatterplot and draw the line of best fit.
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section: Chapter Questions
Problem 7TY
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I need the answers to 3 and 4
Transcribed Image Text:3. Do consumption and income appear to have a high, moderate, or low correlation?
4. Now you will estimate the slope and intercept. Fill in the table to start.
Income (x) Cons (yi) (xi - x) (yi− ỹ) (xi − x)(yi − ỹ) (x¡ − x)²
9
7
1
1
1
1
11
7
3
1
3
9
5
2
-3
-4
12
9
8
7
0
1
0
0
2
2
-6
-4
24
36
9
8
12
9
Transcribed Image Text:In macroeconomics, the marginal propensity to consume (MPC) is the proportion of extra
income that is spent on consumption, and it is important for determining the effects of
monetary and fiscal policy. In this exercise, you will estimate the MPC with the slope from
regression analysis.
1. Your two variables are consumption and income. Which is the dependent variable and
which is the independent variable?
2. You have the following data on consumption and income (in $10,000s).
Income
Consumption 7
9
11
5
8
2
9
12
7
2
7
2
8
9
Make a scatterplot and draw the line of best fit.
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