Which of the Following Raises the Price of a Used

question 200

Multiple Choice

Which of the following raises the price of a used car and increases the equilibrium quantity sold?

• A) a new 8 percent federal excise tax placed on all new car purchases
• B) an increase in wages for used car salespeople
• C) a special rebate program on all new cars
• D) None of the above answers is correct

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Definitions:

Multicollinearity

A statistical phenomenon in which multiple independent variables in a regression model are highly linearly related, affecting the model’s accuracy.

Multicollinearity

A statistical phenomenon in which several independent variables in a regression model are highly correlated, potentially distorting the results of regression analysis.

Regression Coefficients

Parameters in a regression model that represent the change in the dependent variable expected for a one-unit change in the predictor variable, holding all else constant.

Independent Variables

Variables in an analysis that are manipulated or categorized to observe their effect on the dependent variable.