Which of the Following Is True of the R-Squared R2)

question 8

Multiple Choice

Which of the following is true of the R-squared R2) value in Excel's Trendline function?

• A) A value of 1.0 for R2 indicates maximum deviation of the data from the line.
• B) If the value of R2 is above 1.0, the line will be at a perfect fit for the data.
• C) The value of R2 will always be between -1 and 1.
• D) As the value of R2 gets higher, the line will be a better fit for the data.

---

Definitions:

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Opportunity Cost

The cost of not choosing the next best alternative when making a decision.

Leisure

Time utilized for enjoyment and relaxation, free from the obligations of work or serious responsibilities.

Substitution Effect

The change in demand for a good that results from a change in price, making the good more or less expensive relative to other goods.