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Basic Business Statistics, understanding regression output

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
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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.

Solution Summary

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

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