If regression analysis is used to estimate the linear relationship between the natural logarithm of the variable to be forecast and time, then the slope estimate is equal to
A) the linear trend.
B) the natural logarithm of the rate of growth.
C) the natural logarithm of one plus the rate of growth.
D) the natural logarithm of the square root of the rate of growth.

Question

Quizplus · Accepted Answer

The slope estimate in a regression analysis where the dependent variable is the natural logarithm of the variable to be forecast and the independent variable is time represents the natural logarithm of one plus the rate of growth. This is because the exponential growth rate can be linearized by taking the natural logarithm, making the slope of the resulting line equivalent to the log of (1 + growth rate).

If Regression Analysis Is Used to Estimate the Linear Relationship