In the Following Regression Equation, Y Is a Binary Variable

question 18

Multiple Choice

In the following regression equation, y is a binary variable: y = ₀+ ₁x₁+… _k x_k+ u
In this case, the estimated slope coefficient, measures _____.

• A)the predicted change in the value of y when x₁ increases by one unit, everything else remaining constant
• B)the predicted change in the value of y when x₁ decreases by one unit, everything else remaining constant
• C) the predicted change in the probability of success when x₁ decreases by one unit, everything else remaining constant
• D) the predicted change in the probability of success when x₁ increases by one unit, everything else remaining constant

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period, typically reflected as a percentage increase in real GDP.

Doubling Inputs

When the quantities of all inputs used in the production process are increased by the same proportion.

Foreign Direct Investment

is an investment made by a firm or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Foreign Portfolio Investment

Investment in financial assets from another country, such as stocks or bonds, without direct control over the businesses.