Suppose You Decide to Build a Model to Explain Why

question 18

Essay

Suppose you decide to build a model to explain why some companies earned more profits in the past year than others did.
(A) What data wauld yau collect?
(B) What variable do you believe wauld supply the major part of the explanation of the rariation in profits?
(C) If you graph the data winth profits an the vertical gods and your explanatory variable an the horizontal axis, will the relationship be upward sloping or downward sloping?
(D) What does your answer in part (C) imply far whether the data an profits and the data an yaur exglanatory variable are positvely ar negatively carrelated?

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Definitions:

Reactance

A motivational reaction to offers, persons, rules, or regulations that threaten or eliminate specific behavioral freedoms, prompting a desire to regain them.

Reactance Theory

A psychological theory suggesting that people have an aversive reaction to restrictions of their freedoms, leading to a motivation to regain them.

Forbidden Behaviors

Acts that are prohibited or discouraged within a society or group due to cultural, social, or legal norms and values.

Strict Parents

caregivers who enforce rigid rules and expect high levels of obedience and discipline from their children.