In a simple linear regression forecast, it is assumed that changes in _________ predict changes in __________.
A) Demand, the causal variable
B) The slope, the causal variable
C) The intercept, the slope
D) The causal variable, demand

Question

Quizplus · Accepted Answer

In a simple linear regression forecast, the causal variable is the independent variable and is assumed to predict changes in the dependent variable. Therefore, changes in the causal variable (option D) predict changes in demand (the dependent variable). Option A is incorrect because demand is the dependent variable, not the causal variable. Option B is incorrect because the slope is a measure of the relationship between the variables, not the causal variable itself. Option C is incorrect because the intercept is just a constant and does not have a causal role in the relationship between the variables.

In a Simple Linear Regression Forecast, It Is Assumed That