Re-Express Data to Make Them Appropriate for Use with a Linear

question 22

Multiple Choice

Re-express data to make them appropriate for use with a linear model
-Data on labor productivity and unit labor costs were obtained for the retail industry
From 1987 through 2006 (Bureau of Labor Statistics) . A regression was estimated to
Describe the linear relationship between the two variables. Below is the plot of residuals
Versus predicted values. Which of the following re-expression of the data would be
Appropriate?

• A) Square the data values.
• B) Cube the data values.
• C) Use a logarithmic transformation.
• D) Use a geometric transformation.
• E) The data should not be transformed.

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