When the Variance $\sigma _ { \varepsilon } ^ { 2 }$

question 22

Short Answer

When the variance, $\sigma _ { \varepsilon } ^ { 2 }$ , of the error variable $\varepsilon$ is a constant no matter what the value of x is, this condition is called: $\begin{array}{|l|l|}\hline\text { A. } & \text {homocausality. }\\\hline \text { B. } & \text {heteroscedasticity. } \\\hline \text { C. } &\text {homoscedasticity. }\\\hline \text { D. } &\text {heterocausality. }\\\hline\end{array}$

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Definitions:

Deadweight Loss

A societal expense arising from market inefficiency, happening when there is a mismatch between supply and demand.

Equilibrium

A state in a market where the supply of a good matches its demand, resulting in stable prices.

Progressive Income Tax

A tax system in which the tax rate increases as the taxable amount increases, leading to higher earners paying a higher rate of tax on their income.

Equity

The concept of fairness or justice in the allocation of resources or treatment of individuals, or a term referring to ownership interest in a company through stocks.