Your textbook plots the estimated regression function produced by the probit regression of deny on P/I ratio The estimated probit regression function has a stretched "S" shape given that the coefficient on the P/I ratio is positive. Consider a probit regression function with a negative coefficient. The shape would

A) resemble an inverted "S" shape (for low values of X, the predicted probability of Y would approach 1)
B) not exist since probabilities cannot be negative
C) remain the "S" shape as with a positive slope coefficient
D) would have to be estimated with a logit function


Answer: A) resemble an inverted "S" shape (for low values of X, the predicted probability of Y would approach 1)

Economics

You might also like to view...

The amount Jacqueline receives for selling cupcakes beyond the minimum she would be willing to sell the cupcakes for is called

A) consumer surplus. B) producer surplus. C) cooperative surplus. D) deadweight loss.

Economics

Recently, the American Medical Association changed its recommendations on the frequency of pap-smear exams for women. The new frequency recommendation was designed to address the family histories of the patients. The optimal frequency should be where the marginal benefit of an additional pap-test:

a. equals zero. b. is greater than the marginal cost of the test c. is lower than the marginal cost of an additional test d. equals the marginal cost of the test e. both a and b.

Economics

Producers will change their prices when GDP is at the equilibrium level

a. True b. False Indicate whether the statement is true or false

Economics

A price ceiling: a. keeps the price from falling below a certain level. b. is always higher than the equilibrium price

c. is always lower than the equilibrium price. d. keeps the price from rising above a certain level.

Economics