The Business Research Methods

Business Research Methods
Student’s Name
Institution Affiliation
Course
BUSINESS RESEARCH METHODS
Question 1
a) If sales and per capita income are positively related, classify all variables as dependent, independent, moderating, extraneous, or intervening.
While trying to classify different variables in this case, it is essential to identify independent and dependent variables. The care sales are directly correlated with per capita income, whereby the sales of a car will increase and decrease depending on this factor. Alternatively cares sales have on direct effect on income levels. In this case, the dependent variable is the car sales, and the independent variable is the per capita income. The moderating variables, in this case, are the interest rate used to finance the car and the introductions to new competitive models. Since interest rates are also an independent variable, it does not have a direct impact on car sales that per capita income does (Cooper, & Schindler 2014). Interest rate affects the sales of the car but only after income levels are present. That is why it is categorized as moderating variable.
Sales are dependent on interest rates. This is because interest rates have a direct effect on payment. A relationship also exists between sales and housing industry. Housing rates tend to decrease when there is an increase in interest rate. In the regular market, the interest rate increases when interest rates fall. Per capita income exists as an independent variable. This is because sales are directly affected by the rise in the per capita income. When per capita income rises, this will cause an impact for a higher end and the luxury retailers who depend on high-income earners for a majority of their sales (Sekaran, & Bougie 2016). When income increases, consumers will have a more expendable income to spend on luxurious items. Age and gender factors are independent because they are interdependent. There is no specific correlation between age and gender about sales. Alternatively, competitor advertising, new model introductions and competitor dealer discounts are extraneous. This means that they do not have a consistent effect on sales.
b) Comment on the utility of a model based on the hypothesis.
Regarding the utility of the model, it is structured in the manner that the model will produce a significant and an actionable data. Establishments of a core model of the structure comprised of both the independent and dependent variables are the primary aim of making the model relevant. The effect of the dependent variable and independent variables can easily be determined by comparing the amount of new car sales dealership in the most impoverished countries versus the wealthiest countries (Sekaran, &am...