Author Question: Changing the units of measurement, e.g. measuring testscores in 100s, will do all of the following ... (Read 264 times)

Bernana · **on:** Jun 29, 2018

Changing the units of measurement, e.g. measuring testscores in 100s, will do all of the following EXCEPT for changing the

A) residuals
B) numerical value of the slope estimate
C) interpretation of the effect that a change in X has on the change in Y
D) numerical value of the intercept

Question 2

Think of at least nine examples, three of each, that display a positive, negative, or no correlation between two economic variables. In each of the positive and negative examples, indicate whether or not you expect the correlation to be strong or weak.

What will be an ideal response?

stanleka1 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Answer: C

Answer to Question 2

Answer: Answers will vary by student. Students frequently bring up the following correlations. Positive correlations: earnings and education (hopefully strong), consumption and personal disposable income (strong), per capita income and investment-output ratio or saving rate (strong); negative correlation: Okun's Law (strong), income velocity and interest rates (strong), the Phillips curve (strong); no correlation: productivity growth and initial level of per capita income for all countries of the world (beta-convergence regressions), consumption and the (real) interest rate, employment and real wages.