All of the Following Are Assumptions of the Error Terms

question 99

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 are dependent on each other.

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Definitions:

Flexible Budgets

Budgets that can adjust or flex for changes in the volume of activity or other relevant factors, allowing for more accurate forecasts and analysis.

Contribution Margin

The selling price per unit minus the variable cost per unit, representing the incremental money generated for each product/unit sold.

Fixed Budget

A budget that is set for a specific period and does not change, regardless of variations in activity levels, sales volume, or other external factors.

Flexible Budget Amounts

Budget figures that are adjusted based on changes in the volume of activity, allowing for a more accurate reflection of costs under different operational levels.