A fitness club manager records the monthly marketing expenditure, £x\pounds x£x (in hundreds), and the number of new memberships sold, MMM, for 8 months. The product moment correlation coefficient for these data is 0.81.
Stating your hypotheses clearly and using a 5% significance level, test whether there is a positive correlation between marketing expenditure and new memberships.
The manager suggests that a linear regression model could be used to model the data.
State, giving a reason, whether or not the correlation coefficient is consistent with the manager's suggestion.
State, giving a reason, which variable would be the explanatory variable.
The manager calculated the linear regression equation as M=250+12.5xM = 250 + 12.5xM=250+12.5x
Give an interpretation of the gradient of this regression equation.
