TABLE 15-4 The Output from the Best-Subset Regressions Is Given Below

question 15

Short Answer

TABLE 15-4

The output from the best-subset regressions is given below:

Following is the residual plot for % Attendance:

Following is the output of several multiple regression models:
Model (I):

Model (II):

Model (III):

-Referring to Table 15-4, what are, respectively, the values of the variance inflationary factor of the 3 predictors?

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Definitions:

Potential Output

The level of productivity an economy can achieve with full employment and resources utilization, without causing inflation.

Natural Rate

The Natural Rate often refers to the natural rate of unemployment, where the unemployment rate is at a level expected in a fully efficient market without cyclical or short-term unemployment.

Long-Run Aggregate Supply Curve

This curve shows the relationship between the overall price level and the total output produced in an economy when wages and resource prices fully adjust to changes, reflecting an economy’s maximum sustainable output level.

Potential Output

A measure of the highest level of economic output an economy can sustain over a period without increasing inflation; synonymous with potential GDP.