Suppose a Regression with 51 Observations Returns a Regression Sum

question 91

Multiple Choice

Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000.The associated residual sum of squares is:

• A) 194,000.
• B) 200,000.
• C) 150,000.
• D) None of the choices.

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Definitions:

Average Propensity

Average Propensity refers to the average tendency of individuals or entities, such as the average propensity to consume or save, measured over a specific period or income level.

Disposable Income

The available cash reserves for households to spend and save once taxes on income have been settled.

Consumption

The use of goods and services by households; an economic activity that represents spending by consumers.

Average Propensity

The ratio of total consumption to total income, indicating the average tendency of consumers to spend their income.