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Your Textbook States That Correlation of the Error Term Across

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Your textbook states that correlation of the error term across observations "will not happen if the data are obtained by sampling at random from the population." However, in one famous study of the electric utility industry, the observations were listed by the size of the output level, from smallest to largest. The pattern of the residuals was as shown in the figure. Your textbook states that correlation of the error term across observations  will not happen if the data are obtained by sampling at random from the population.  However, in one famous study of the electric utility industry, the observations were listed by the size of the output level, from smallest to largest. The pattern of the residuals was as shown in the figure.   What does this pattern suggest to you? What does this pattern suggest to you?


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