To test whether or not the population regression function is linear rather than a polynomial of order r,
A) check whether the regression R2 for the polynomial regression is higher than that of the linear regression.
B) compare the TSS from both regressions.
C) look at the pattern of the coefficients: if they change from positive to negative to positive, etc., then the polynomial regression should be used.
D) use the test of (r-1) restrictions using the F-statistic.
Answer: D
You might also like to view...
Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:
A. increase. B. decrease. C. remain unchanged. D. increase and then decrease.
The outcome of first-degree price discrimination is:
A) Pareto efficient with equity. B) Pareto efficient with inequity. C) Pareto inefficient with inequity. D) Pareto inefficient but is equitable.
Whom among the following was a classical economist?
A. David Ricardo B. Jean-Baptiste Say C. Adam Smith D. all of these
A manufacturing company designs and produces an incredibly efficient solar heating system for large buildings and earns very large profits on it. Which of the following is true?
A. The profits this firm earns aren't deserved, as the firm did not take any risks. B. The profits this firm earns are a return for an innovation. C. This firm must not be in a competitive market if it was able to earn a profit. D. both A and C