To decide whether or not the slope coefficient is large or small,
A)you should analyze the economic importance of a given increase in X.
B)the slope coefficient must be larger than one.
C)the slope coefficient must be statistically significant.
D)you should change the scale of the X variable if the coefficient appears to be too small.

Question

Quizplus · Accepted Answer

The economic importance of a given increase in X is the most relevant factor in determining whether the slope coefficient is large or small. For example, an increase in X of 1 unit may be economically meaningful in one context but not in another. Therefore, analyzing the economic significance is crucial in interpreting the magnitude of the slope coefficient.

To Decide Whether or Not the Slope Coefficient Is Large