In evaluating the economic plausibility of a regression model, the analyst is determining
A) the statistical significance of the relationship of the independent variable, X with the dependent variable, Y.
B) whether the chosen independent variable, X, is a viable, sensible predictor of the dependent variable, Y, using judgment and understanding of cause-and-effect relationships.
C) the degree to which the regression line fits the actual observations.
D) the correlation of variable costs to fixed costs in the total cost line determination.

Question

Quizplus · Accepted Answer

The economic plausibility of a regression model involves assessing whether the independent variable is a sensible predictor of the dependent variable based on judgment and understanding of cause-and-effect relationships.

In Evaluating the Economic Plausibility of a Regression Model, the Analyst