The Following Simple Model Is Used to Determine the Annual

question 15

Multiple Choice

The following simple model is used to determine the annual savings of an individual on the basis of his annual income and education. Savings = β₀ + ₀ Edu + β₁Inc + u
The variable 'Edu' takes a value of 1 if the person is educated and the variable 'Inc' measures the income of the individual.
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Refer to the above model. If ₀ > 0, _____.

• A)uneducated people have higher savings than those who are educated
• B)educated people have higher savings than those who are not educated
• C)individuals with lower income have higher savings
• D)individual with lower income have higher savings

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Definitions:

Attitude

A learned tendency to consistently respond positively or negatively to people or events.

Perception Influences

Perception influences denote the factors that affect how individuals interpret and understand their environment and experiences.

Recognizing

The action or process of identifying someone or something from previous encounters or knowledge.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates.