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    Basic Business Statistics, understanding regression output

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    1. In a simple linear regression problem, r and b1:

    a. may have opposite signs.
    b. must have the same sign.
    c. must hae opposite signs.
    d. are equal

    2. A professor of industrial relations believes that an individual's wage rae at a factory (Y) depends on his performance rating (X1) and the number of economics courses the employee successfully completed in college (X2). The professor randomly selects 6 workers and collects the following information:

    Employee Y($) X1 X2
    1 10 3 0
    2 12 1 5
    3 15 8 1
    4 17 5 8
    5 20 7 12
    6 25 10 9

    Referring to the table, for these data, what is the estimatd coefficient for performance rating, b1?

    a. 0.616
    b. 1.054
    c. 6.932
    d. 9.103

    3. In a multiple regression problem involving two independent variables, if b1 is computed to be +2.0, it means that:

    a. the relationship between X1 and Y is significant.
    b. the estimated average of Y increases by 2 units for each increase of 1 unit of X1, holding X2 constant.
    c. the estimated average of Y increases by 2 units for each increase of 1 unit of X1, without regard to X2.
    d. the estimated average of Y is 2 when X1 equals zero.

    4. If the correlation coefficient (r)=1.00, then:

    a. the y-intercept (b0) must equal 0.
    b. the explained variation equals the unexplained variation.
    c. there is no unexplained variation.
    d. there is no explained variation.

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    Solution Summary

    This solution answers and explains four basic business statistics multiple choice questions about regression and correlation.