Refer to the Following Table When Answering the Following Questions

question 89

Multiple Choice

Refer to the following table when answering the following questions.
Table 4.1: Production Model's Prediction for Per Capita GDP (US = 1) (Source: Penn World Tables 9.0)
-Consider Table 4.1, which compares the model to actual statistical data on per capita GDP. You observe the model:

• A) consistently underestimates the level of per capita GDP.
• B) consistently overestimates the level of per capita GDP.
• C) does a really good job of estimating the level of per capita GDP.
• D) clearly contains all factors that affect per capita GDP.
• E) None of these answers is correct.

---

Definitions:

Independent Variables

Variables in a statistical model that are presumed to influence or predict the outcome of a dependent variable.

Variances

Statistical measures reflecting the dispersion or spread of a set of data points or how far each value in the set is from the mean.

Covariance

A measure that indicates the extent to which two variables change together; if they increase or decrease similarly.

Coefficient Of Correlation

An index that measures the magnitude and direction of a straight-line association between two variables.