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To Decide Whether Yi = β0 + β1X + Ui

Question 10

Multiple Choice

To decide whether Yi = β0 + β1X + ui or ln(Yi) = β0 + β1X + ui fits the data better,you cannot consult the regression R2 because


A) ln(Y) may be negative for 0<Y<1.
B) the TSS are not measured in the same units between the two models.
C) the slope no longer indicates the effect of a unit change of X on Y in the log-linear model.
D) the regression R2 can be greater than one in the second model.

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