A simple linear regression,Sales = β₀ + β₁ Advertising + ε,is estimated using time-series data over the last 10 years.The residuals,e,and the time variable,t,are shown in the accompanying table. a.Graph the residuals e against time and look for any discernible pattern.
b.Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

Question

A simple linear regression,Sales = β₀ + β₁ Advertising + ε,is estimated using time-series data over the last 10 years.The residuals,e,and the time variable,t,are shown in the accompanying table.

A simple linear regression,Sales = β<sub>0</sub> + β<sub>1</sub> Advertising + ε,is estimated using time-series data over the last 10 years.The residuals,e,and the time variable,t,are shown in the accompanying table. a.Graph the residuals e against time and look for any discernible pattern. b.Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

a.Graph the residuals e against time and look for any discernible pattern.
b.Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

Quizplus · Accepted Answer

The Answer of A simple linear regression,Sales = β₀ + β₁ Advertising + ε,is estimated using time-series data over the last 10 years.The residuals,e,and the time variable,t,are shown in the accompanying table. a.Graph the residuals e against time and look for any discernible pattern. b.Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

A Simple Linear Regression,Sales = β0 + β1 Advertising

A Simple Linear Regression,Sales = β₀ + β₁ Advertising