Consider the Following Linear Trend Equation of an Industry's Sales

Multiple Choice

Consider the following linear trend equation of an industry's sales: y_t = 120 + 12t, where t is measured in years and sales are measured in millions of dollars. Which is the most reasonable conclusion?

A) We would forecast that sales will increase $12 million in the next year.
B) We would forecast that sales will increase 12 percent in the next year.
C) On the average, sales will increase 12/(120 + 12 × 10) = 0.05, or 5 percent next year.
D) The year-to-year change will depend on the value of t.