In a Simple Linear Regression Model, the Coefficient of Determination

question 118

True/False

In a simple linear regression model, the coefficient of determination not only indicates the strength of the relationship between the independent and dependent variables, but also shows whether the relationship is positive or negative.

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Definitions:

Slutsky Substitution Effect

A concept in economics that describes how a change in the price of a good affects consumption patterns, separating the effect into income and substitution effects.

Indifference Curve

A graph that shows different combinations of two goods among which a consumer is indifferent, implying the same level of utility for each combination.

Hicks Version

Refers to John Hicks' adaptation of consumer demand theory, particularly in relation to indifference curves and utility maximization.

Substitution Effect

A modification in buying behavior triggered by a change in goods' comparative prices, prompting people to switch from one product to another.