A Simple Linear Regression, ,Is Estimated Using Cross-Sectional Data

question 68

Essay

A simple linear regression, ,is estimated using cross-sectional data from 10 firms.The resulting residuals e,along with the values of the explanatory variable Advertising (x,in $100s),are shown in the accompanying table. a.Graph the residuals e against Advertising (x)and look for any discernible pattern.
B)Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

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Definitions:

Physical Strength

The measure of an individual’s exertion ability in physical tasks, reflecting the capacity to lift, move, or press objects.

REM Sleep

A stage of sleep characterized by rapid eye movements, vivid dreaming, and increased brain activity.

Brain Waves

Patterns of neuronal electrical activity in the brain that can be measured using EEG and are associated with different states of consciousness.

REM Sleep

A stage of sleep characterized by rapid eye movements, more dreaming, and bodily movement; important for mental restoration.