Which of the Following Best Describes the Durbin-Watson Test

question 74

Multiple Choice

Which of the following best describes the Durbin-Watson test?

• A)The Durbin-Watson test is used to determine if there is multicollinearity.
• B)The Durbin-Watson test is used to determine if there is heteroscedasticity.
• C)The Durbin-Watson test is used to determine if there is first-order autocorrelation.
• D)The Durbin-Watson test is used to determine if there is homoscedasticity.

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.

Income

The amount of money received by an individual or group over a certain period, often derived from work, investments, or business activities.

Utility Function

A mathematical formula that represents a consumer's preference ranking for various bundles of goods.

Budget Line

A graphical representation that shows all the possible combinations of two goods or services that can be purchased with a given budget, keeping the price of both goods constant.