Which of the Following Is Not an Assumption for the Simple

question 46

Multiple Choice

Which of the following is not an assumption for the simple linear regression model?

• A) The distribution of the error terms will be skewed to left or right depending on the values of the dependent variable.
• B) The error terms have equal variances for all values of the independent variable.
• C) The error terms are independent of each other.
• D) The mean of the dependent variable for all levels of the independent variable can be connected by a straight line.
• E) None of these.

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Definitions:

Unregulated Market

A market operating without governmental rules or oversight wherein the forces of supply and demand are unimpeded by outside control.

Price Controls

Regulatory measures by which a government seeks to control the price of goods and services, either by setting maximum prices (price ceilings) or minimum prices (price floors).

Natural Gas

A fossil fuel composed primarily of methane, used as a source of energy for heating, cooking, and electricity generation.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.