When Al Makes the Statement, "The Cost of Living Has

question 470

Multiple Choice

When Al makes the statement, "The cost of living has increased 10 percent over the past 10 years," he is

• A) making a normative statement.
• B) making a positive statement.
• C) testing an economic model.
• D) facing the standard of living tradeoff.

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Definitions:

Indicator Variable

A variable that takes on the value of 0 or 1 to indicate the absence or presence of some categorical effect or attribute.

Multiple Regression

A statistical analysis tool that assesses the effect of multiple independent variables on a particular dependent variable.

Stepwise Regression

A technique in regression modeling that involves automatically selecting which variables predict the outcome.

Nonparametric Tests

Statistical tests that do not assume a specific distribution shape for the population from which the samples are drawn.