A Residuals Plot Is Useful Because

question 10

Multiple Choice

A residuals plot is useful because
I.it will help us to see whether our model is appropriate.
II.it might show a pattern in the data that was hard to see in the original scatterplot.
III.it will clearly identify influential points.

• A)I and II only
• B)I, II, and III
• C)II only
• D)I only
• E)I and III only

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Definitions:

Phillips Curve

An economic concept that illustrates an inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Natural Rate

Refers to the level of economic output or unemployment that is consistent with stable inflation, not influenced by short-term fluctuations.

Money Supply Growth

An increase in the total amount of money in circulation or in the economy, which can affect inflation rates, interest rates, and economic growth.

Phillips Curve

A concept in economics illustrating an inverse relationship between the rate of unemployment and the rate of inflation within an economy.