Given Income_i= 10 + 1.5Age_i+ e_i, interpret the model A) A one year increase in age is expected to lead to a 1.5 increase in income B) A 1.5 increase in age is expected to lead to a 1 increase in income C) A 1.5 increase in income is expected to lead to a 1 unit increase in age D) Income is 10

Question

Quizplus · Accepted Answer

The model states that there is a linear relationship between income and age, where the intercept (S1U1B0) is 10 and for every one unit increase in age (S1U1B1), there is a 1.5 unit increase in income (S1U1B1iS1U1B0S1U1B1). Therefore, choice A is correct. Choices B and C are incorrect as they do not accurately reflect the model, and choice D is incorrect as it only states the value of the intercept and does not consider the effect of age on income.

Given Incomei = 10 + 1

Given Income_i= 10 + 1