Which Residual Plot Would You Examine to Determine Whether the Assumption

question 57

Multiple Choice

Which residual plot would you examine to determine whether the assumption of constant error variance is satisfied for a model with two independent variables $x _ { 1 }$ and $x _ { 2 }$ ?

• A) Plot the residuals against observed \(y\) values.
• B) Plot the residuals against predicted values, \(\hat { y }\).
• C) Plot the residuals against the independent variable \(x _ { 1 }\).
• D) Plot the residuals against the independent variable \(x _ { 2 }\).

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Definitions:

Compensating Differential

The additional amount of income that an employee requires to accept a job that entails less desirable aspects, such as longer hours or higher risks.

Human Capital

The economic value of a worker's experience and skills, including education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.

Unskilled Labor

Labor that requires no specialized skills, education, or training for its performance.

Productivity Gains

Increases in the amount of output produced per unit of input, reflecting improvements in efficiency, technology, or processes.