Suppose You Decide to Build a Model to Explain Why

Essay

Suppose you decide to build a model to explain why some companies earned more profits in the past year than others did.
(A) What data wauld yau collect?
(B) What variable do you believe wauld supply the major part of the explanation of the rariation in profits?
(C) If you graph the data winth profits an the vertical gods and your explanatory variable an the horizontal axis, will the relationship be upward sloping or downward sloping?
(D) What does your answer in part (C) imply far whether the data an profits and the data an yaur exglanatory variable are positvely ar negatively carrelated?