The Interpretation of the Slope Coefficient in the Model Ln(Y_i)=

question 53

Multiple Choice

The interpretation of the slope coefficient in the model ln(Y_i) = β₀ + β₁ ln(X_i) + u_i is as follows:

• A)a 1% change in X is associated with a β₁ % change in Y.
• B)a change in X by one unit is associated with a β₁ change in Y.
• C)a change in X by one unit is associated with a 100 β₁ % change in Y.
• D)a 1% change in X is associated with a change in Y of 0.01 β₁.

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used to create the product.

Inventory Turnover

A measure illustrating the frequency at which a firm's stock is sold and replenished within a specific timeframe, showcasing the effectiveness of managing inventory.

Low Ratio

A financial metric that indicates a ratio lower than industry norms, often suggesting less risk or lower performance in certain contexts.

IRS Guidelines

The rules and regulations issued by the Internal Revenue Service governing the tax process in the United States.