If the Residuals Have a Constant Variance, Which of the Following

question 39

Multiple Choice

If the residuals have a constant variance, which of the following should be evident?

• A) The residuals should have a variance equal to zero for all levels of the independent variable.
• B) The plot of the residuals against each x variable should show that the spread in the residuals is about the same at all levels of each of the independent variables.
• C) The average residual should be about zero and the residual standard deviation should be approximately 1.
• D) None of the above

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Definitions:

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Efficiency

The optimal use of resources to achieve the best possible outcome.

Opportunities

Options or possibilities for individuals or firms to engage in beneficial activities or investments.

Equity

Fairness or justice in the way people are treated or how resources and wealth are distributed.