Cause-And-Effect Direction Between X and Y May Be Determined by Running

question 76

True/False

Cause-and-effect direction between X and Y may be determined by running the regression twice and seeing whether Y = β₀ + β₁X or X = β₁ + β₀Y has the larger R².

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Definitions:

Salvage Value

The foreseen remaining value of an asset at the culmination of its viable life.

Useful Life

The expected period over which a fixed asset is anticipated to be usable by an entity, after which it will no longer be efficient or effective.

Double-Declining-Balance

A method of accelerated depreciation that calculates depreciation expenses by doubling the straight-line rate.

Accumulated Depreciation

The cumulative sum of depreciation expense assigned to a physical asset since its initial use, representing its cost allocation.