The type of economic indicator that can best be used for business forecasting is the:

Answer

                                leading indicator

                                coincident indicator

                                lagging indicator

                                current business inventory indicator

                                optimism/pessimism indicator

For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use?

Answer

                                ordinary least squares regression on historical data

                                market experiments, where the price is set differently in two markets

                                consumer surveys, where potential customers hear about the product and are asked their opinions

                                double log functional form regression model

The constant or intercept term in a statistical demand study represents the quantity demanded when all independent variables are equal to:

Answer                                1.0

                                their minimum values

                                their average values

                                0.0

The standard deviation of the error terms in an estimated regression equation is known as:

Answer

                                coefficient of determination

                                correlation coefficient

                                Durbin-Watson statistic

                                standard error of the estimate

Those goods having a calculated income elasticity that is negative are called:

Answer

                                producers' goods

                                durable goods

                                inferior goods

                                nondurable goods

Iron ore is an example of a:

Answer

                                durable good

                                producers' good

                               nondurable good

                                consumer good

Producers' goods are:

Answer

                                consumers' goods

                                raw materials combined to produce consumer goods

                                durable goods used by consumers

                                always more expensive when used by corporation

If demand were inelastic, then we should immediately:

Answer

                                cut the price.

                                keep the price where it is.

                                go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve. 

                                raise the price.

The ____ is the ratio of ____ to the ____.

Answer

                                standard deviation; covariance; expected value

                                coefficient of variation; expected value; standard deviation

                                correlation coefficient; standard deviation; expected value

                                coefficient of variation; standard deviation; expected value

The net present value of an investment represents

Answer

                                an index of the desirability of the investment

                                the expected contribution of that investment to the goal of shareholder wealth maximization

                                the rate of return expected from the investment

                                the rate of return on equity