Suppose the Ordinary Least-Squares Approach to a Regression Analysis Produced

question 55

Multiple Choice

Suppose the ordinary least-squares approach to a regression analysis produced the following: Y = 20 - 39X
R² = .90
Which of the following statements is FALSE?

• A) For every unit change in X there is a corresponding negative change in the average value of Y of 39 units.
• B) 90 percent of the variation in Y is associated with variation in X.
• C) The slope of the line is 20.
• D) The average value of Y given x = 10 is -370.
• E) If X = 0, then Y = 20.

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Definitions:

Tax Burden

The overall economic weight of taxation on an individual, corporation, or other entity, often measured as a percentage of income or revenue.

Inelastic

A characteristic of demand whereby a change in price leads to a lesser change in the quantity demanded, indicating low sensitivity to price changes.

Price Ceilings

Government-imposed limits on how high a price can be charged for a product, service, or commodity.

Equilibrium Price

The charge where the amount of merchandise supplied equals the amount consumers are willing to purchase.