The Simple Linear Regression (Least Squares Method) Minimizes

question 114

Multiple Choice

The simple linear regression (least squares method) minimizes

• A) the explained variation.
• B) SS_yy.
• C) total variation.
• D) SS_xx.
• E) SSE.

---

Definitions:

Income

The money received on a regular basis for work or through investments.

Optimal Consumption

The level of consumption at which a consumer achieves the highest possible satisfaction or utility given their income and the prices of goods and services.

Initial Endowment

The initial distribution of income, wealth, or resources among individuals or groups in an economy.

Relative Prices

The price of one good or service compared to another, often indicating their opportunity cost or trade-off.