If the Durbin-Watson Statistic Is Greater Than (4 − D_L)

question 74

Multiple Choice

If the Durbin-Watson statistic is greater than (4 − d_L) , then we conclude that

• A) there is significant positive autocorrelation.
• B) there is significant negative autocorrelation.
• C) there is significant autocorrelation, but we cannot identify whether it is positive or negative.
• D) the test result is inconclusive.

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Definitions:

Simplified Tax Formula

A streamlined method for calculating taxable income, starting with adjusted gross income, subtracting either standard or itemized deductions, and personal exemptions.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or expenditure), revealing the percentage of income paid in taxes.

Tax Liability

The total amount of tax owed to the government by an individual, corporation, or other entity in a given tax period.

Taxable Income

The amount of income that is used to calculate an individual or a corporation's income tax due, after all deductions and exemptions.