An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($ billions) and aggregate price (consumer price index). Annual data from 30 years were collected. Which of the following would be the most appropriate analysis to perform?
A) simple linear regression
B) multiple linear regression
C) exponential smoothing
D) autoregressive modeling for trend fitting and forecasting

Question

Quizplus · Accepted Answer

Since the economist is interested in how consumption is influenced by both gross domestic product and aggregate price, the appropriate analysis to perform is multiple linear regression. This will allow the economist to examine the relationship between consumption and both predictors, while accounting for their potential interaction.

An Economist Is Interested to See How Consumption for an Economy