Economics ESSAY

An automobile manufacturer observes the demand for its brand increasing as per capita income increases. Sales increases also follow low interest rates, which ease credit conditions. Buyer purchase behaviors is seen to be dependent on age and gender. Other factors influencing sales appear to fluctuate almost randomly (competitor advertising, competitor dealer discounts, introductions of competitive models).

 

A) If sales and per capita income are positively related, classify all variables as dependent, independent, moderating, extraneous, or intervening.

 

B) Comment on the utility of a model based on the hypothesis

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