Use the following to answer the question(s) below.
A linear regression model was fit to data representing technology adoption over time. The regression output and residual plot appears below.
-It is known that at 1% significance level the critical values for Durbin-Watson statistic are 0.738 and 1.038. The Durbin-Watson statistic indicates
A) that the residuals are positively autocorrelated.
B) that the residuals are negatively autocorrelated.
C) that there is no positive autocorrelation.
D) that there is no negative autocorrelation.
E) that the test is inconclusive as dL

Question

Use the following to answer the question(s) below.
A linear regression model was fit to data representing technology adoption over time. The regression output and residual plot appears below.  
-It is known that at 1% significance level the critical values for Durbin-Watson statistic are 0.738 and 1.038. The Durbin-Watson statistic indicates
A) that the residuals are positively autocorrelated. 
B) that the residuals are negatively autocorrelated. 
C) that there is no positive autocorrelation. 
D) that there is no negative autocorrelation. 
E) that the test is inconclusive as dL < D < dU.

Quizplus · Accepted Answer

The Durbin-Watson statistic is a test for autocorrelation in the residuals of a regression model. The statistic ranges from 0 to 4, with 2 indicating no autocorrelation. In this case, the Durbin-Watson statistic is 0.052, which is less than the lower critical value of 0.738. This indicates that there is positive autocorrelation in the residuals, meaning that the errors in the regression model are correlated with each other over time.

Use the Following to Answer the Question(s) Below