Question

Explain what a slope of .5 would mean if you were measuring the relationship between consumer spending and income, where the dependent variable is consumer spending and the independent variable is income?

Answer 1

It would mean that consumer spending went up fifty cents for every dollar income went up. The slope is positive, which we would expect, since we would expect spending to go up as folks made more money. However, they only spend half of their extra income, meaning the other half went to savings, taxes or other areas.