When we estimate a regression to determine the relationship between changes in consumption and changes in current income,we find that
A)there are no residuals.
B)the R² is zero.
C)the MPC is larger than one.
D)all of the above
E) none of the above

Question

Quizplus · Accepted Answer

All of the options presented are incorrect. There will always be residuals, the R² can never be zero as there will always be some relationship between the variables, and the MPC can never be larger than one as it represents a proportion of income. Therefore, the correct answer is E, none of the above.

When We Estimate a Regression to Determine the Relationship Between