10.00 points Hiroshi S campaign to thwart the effect of rising unemployment rate

Question

10.00 points Hiroshi S campaign to thwart the effect of rising unemployment rates on business. He used monthly data on sales ($1,00 s), advertising costs (s), and the unemployment rate (%) from January 2008 to May 2009 to estimate the following sample regression equation: ato, an owner of a sushi restaurant in San Francisco, has been following an aggressive marketing Sales,-12.63 + 0.05Advertising Costst-1-049Unemployment Rater-1. had budgeted $500 toward advertising costs in May 2009. Make a forecast for Sales for June 2009 if the unemployment rate in May 2009 was 9.4%. (Enter your answer in dollars not in thousands.) Sales b. What will be the forecast if he raises his advertisement budget to $640? (Enter your answer in dollars not in thousands.) Sales c. Reevaluate the above forecasts if the unemployment rate was 9.7% in May 2009, (Enter your answers in dollars not in thousands.) Sales Advertising 500 540

Explanation / Answer

a)

here from above regression equation:

sales =(12.63+0.05*500-0.49*9.4)*1000=33024

b)

sales =(12.63+0.05*540-0.49*9.4)*1000=35024

c)

advertising sales 500 32877 540 34877

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