Severe multicollinearity is present. (True / False) b. Which combination of year

Question

Severe multicollinearity is present. (True / False)

b.    Which combination of year, expenses, employees, and rainfall would be expected to yield the highest number of units sold?

1997, $10,000, 100, 28

2003, $8,000, 150, 25

1998, $9,000, 130, 32

2001, $8,500, 120, 25

#2 SUMMARY OUTPUT Regression Statistics 0.920040902 0.848475281 0795300347 98.98134256 Multiple R R Square Adjusted BSg Standard Error ANOVA MS P-value Residual Total 4 648222.0906 162055.523 1.54082 7.98E-05 12 117587.6741 9797.30818 16 765789.7647 Standard Error 133070.228 31948.38788 -4.1654233 t Stat P-value 0.00131 68.04674091 16.02491447 4.24630915 0.001135 0.05338581 0.055588954 0.9600385 0.355981 17.60761927 4.013142297 4.38748939 0.000885 1.31898921 9.574793352 -0.1377564 0.892717 Rainfall Year Expenses #Empl Rainfall Units Sold Year #Employees Rainfall Units Sold 0.928893351 0.70540791 -0.60765039 0.274546946 0.178248611 -0.0544823 0.766291749 0.702882076 0.1880513 0.319921

Explanation / Answer

In this case the best independent variables are 'year' and 'Employees' and

and we infer that the best combination 'year and employees' would be expected to yield the highest number of units sold

since p values are very smaller comparing with other p values in the output.

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