All of the Following Are Assumptions of the Error Terms

question 146

Multiple Choice

All of the following are assumptions of the error terms in the simple linear regression model except:

• A)Errors are normally distributed.
• B)Error terms have a mean of zero.
• C)Error terms have a constant variance.
• D)Error terms indicate a positive autocorrelation.
• E)Error terms are statistically independent.

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Definitions:

Free Trade

The absence of tariffs, quotas, or other governmental restrictions on international trade, allowing goods and services to move freely across borders.

Opportunity Cost

Signifies the advantages that a person, investor, or company forgoes by selecting one option instead of another.

Tables

Arrangements of data in rows and columns that systematically display information.

Comparative Advantage

The ability of an individual, firm, or country to produce a certain good at a lower opportunity cost than its trading partners.