Consider the Following to Answer the Question(s) Below

question 2

Multiple Choice

Consider the following to answer the question(s) below:
Suppose that data on labour productivity and unit labour costs were obtained for the retail industry from 1995 through 2014. A regression was estimated to describe the linear relationship between the two variables.
-What does the plot of residuals suggest?

• A) The plot shows curvature. So, the Equal Spread condition is not satisfied.
• B) The residual plot has no clear pattern.
• C) The Equal Variance assumption is met.
• D) All assumption and condition for regression inference appear to be met.
• E) As the given residual plot appears generally patternless, we can construct the linear regression model.

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Realist

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