To check out whether the regressions assumption involving normality of the error terms (residuals) is valid, it is appropriate to construct a normal probability plot. If this plot forms a straight line from the lower-left-hand corner to the upper-right-hand corner, the error terms may be assumed to be normally distributed.

Question

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This statement is true, as a straight line on a normal probability plot indicates that the residuals follow a normal distribution.

To Check Out Whether the Regressions Assumption Involving Normality of the Error