​The Following Regression Analysis Was Conducted for the Inflation Rate

question 13

Multiple Choice

​The following regression analysis was conducted for the inflation rate information and exchange rate of the British pound: Regression results indicate that a₀ = 0 and a₁ = 1. Therefore:

• A) ​purchasing power parity holds.
• B) ​purchasing power parity overestimated the exchange rate change during the period under examination.
• C) ​purchasing power parity underestimated the exchange rate change during the period under examination.
• D) ​purchasing power parity will overestimate the exchange rate change of the British pound in the future.

---

Definitions:

Workers' Compensation Acts

Laws designed to provide financial and medical benefits to employees who are injured or become ill as a direct result of their job.

Litigation

The process of taking legal action in court to enforce or defend one's rights.

Injured Workers

Individuals who have suffered physical or psychological harm as a result of their work activities or conditions.

Title VII

A part of the Civil Rights Act of 1964 that forbids discrimination in employment due to an individual's race, color, religion, gender, or country of origin.