The Scatter Chart Below Displays the Residuals Verses the Dependent

question 52

Multiple Choice

The scatter chart below displays the residuals verses the dependent variable, x. Which of the following conclusions can be drawn from the scatter chart given below? ​

• A)The residuals have a increasing variance as the dependent variable increases.
• B)The model captures the relationship between the variables accurately.
• C)The regression model follows the standard normal probability distribution.
• D)The residual distribution is consistently scattered about zero.

---

Definitions:

Money Demanded

The total amount of money that households and businesses wish to hold at a given time, often influenced by interest rates.

Fed Buys Government Bonds

The action by the Federal Reserve to purchase government securities from the market, which increases the money supply and lowers interest rates.

Banking System Reserves

The portion of deposits that banks must hold in reserve and not lend out, often held at the central bank to ensure liquidity.

Money Supply

The sum of financial resources, comprising cash and deposits in banks, accessible in an economy at a particular moment.