In the Probit Model Pr(Y = 1 | X₁, X₂

question 4

Multiple Choice

In the probit model Pr(Y = 1 | X₁, X₂,..., X_k) = ?(?₀ + ?₁X₁ + ?_xX₂ + ... + ?_kX_k) ,

• A)the ?'s do not have a simple interpretation.
• B)the slopes tell you the effect of a unit increase in X on the probability of Y.
• C)?₀ cannot be negative since probabilities have to lie between 0 and 1.
• D)?₀ is the probability of observing Y when all X's are 0

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Definitions:

Imports

Imports are goods or services brought into one country from another country for sale, often to satisfy domestic demand for products not locally produced.

Importing

The purchase of goods and services from foreign sources.