The Normality Assumption Implies That

question 17

Multiple Choice

The normality assumption implies that:

• A)the population error u is dependent on the explanatory variables and is normally distributed with mean equal to one and variance σ².
• B)the population error u is independent of the explanatory variables and is normally distributed with mean equal to one and variance σ.
• C)the population error u is dependent on the explanatory variables and is normally distributed with mean zero and variance σ.
• D)the population error u is independent of the explanatory variables and is normally distributed with mean zero and variance σ².

---

Definitions:

Economics Textbook

A publication that systematically presents economic theories, principles, and concepts to learners at various levels of education.

Opportunity Cost

Abandoning the possibility of gains from alternative options by selecting one choice.

Vending Machine

An automated machine that provides items such as snacks, beverages, and other products to consumers after money, a credit card, or a specially designed card is inserted into the machine.

Bag of Chips

A packaged snack made from thinly sliced potatoes or other vegetables, fried or baked, commonly seasoned and served in a sealed bag.