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Assume that a Big Mac burger costs $3.57 in Australia and 7.80 zlotys in Poland. If the exchange rate is 3 zlotys per dollar, purchasing power parity predicts that the dollar will:
Perfect Correlation
Perfect correlation occurs when two variables move in unison, either directly (perfect positive correlation) or inversely (perfect negative correlation), with a correlation coefficient of +1 or -1, respectively.
Perfect Prediction
A situation where a model or analysis predicts the outcome with 100% accuracy, with no errors.
Regression Equation
An equation that describes the line of best fit through a dataset, used to predict the outcome variable.
Regression Line
A line of best fit through a dataset, used to predict the value of a dependent variable based on the value of an independent variable.
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