In a Multiple Regression Model,the Probability Distribution of the Error $\varepsilon$

question 51

Multiple Choice

In a multiple regression model,the probability distribution of the error variable $\varepsilon$ is assumed to be:

• A) normal.
• B) non-normal.
• C) positively skewed.
• D) negatively skewed.

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Definitions:

Shift

A change in the position of a demand or supply curve, indicating a change in the quantity demanded or supplied at every price.

Subsidy

Financial aid supplied by the government to an industry or business, with the aim of keeping prices low for consumers or aiding the business to be competitive.

Efficiency Loss

Economic costs that arise when market equilibrium is not achieved, or when resources are not allocated optimally, leading to waste or suboptimal outcomes.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.