The Goals of Model Building Are to Find a Good

question 45

True/False

The goals of model building are to find a good model with the fewest independent variables that is easier to interpret and has lower probability of collinearity.

---

Definitions:

Vancouver Stock Exchange

A defunct stock exchange that was located in Vancouver, Canada, historically known for trading in small-cap stocks.

Aggregate Expenditure

The total amount of spending in an economy, consisting of consumer spending, investment, government spending, and net exports.

Marginal Propensity

The ratio of the change in an economic variable (such as consumption spending) to the change in another variable (such as income).

Planned Investment

Expenditures on capital goods by firms, intended to increase their future production capacity.