Question: Given the equation y = 2x + 4, answer the following questions:
a. What type of equation is this?
b. What is the independent variable?
c. What is the dependent variable?
d. What term do we use for the "2", and what does it mean?
e. What term do we use for the "4", and what does it mean?
f. Graph this equation using its (x,y) coordinates
g. If the equation resulted from a regression analysis involving a set of ten (x,y) data points:
(i) What is the value of y when x = 4?
(ii) If r = 0.80, what is the "goodness of fit" of the equation with the data points?
(iii) What suggestions would you make to improve the "goodness of fit"?
(iv) How does "goodness of fit" relate to the confidence level for the equation?
h. If the two variables were disposable income and building permits, which would be the independent variable and which the dependent variable? State your reasons.
i. If the two variables were interest rates and mortgage re-financings, would you expect the correlation coefficient (r) to be positive or negative? State your reasons.
j. How can regression analysis be used in business operations and future planning?