The difference between the observed value of the dependent variable and the value predicted using the estimated regression equation is known as the
A)constant term.
B)error term.
C)residual.
D)model parameter.

Question

Quizplus · Accepted Answer

The difference between the observed value of the dependent variable and the value predicted using the estimated regression equation is called the residual. This is the portion of the dependent variable that cannot be explained by the independent variable(s) in the model. The error term (B) is similar, but it refers to the portion of the dependent variable that is due to random error or other factors not included in the model. The constant term (A) is simply the intercept value in the regression equation, and the model parameters (D) refer to the coefficients on the independent variables in the model.

The Difference Between the Observed Value of the Dependent Variable