Econometrics

AP Statistics Name ____________________________________________ Chapter 4 Practice Test Part I - Multiple Choice Suppose that the scatterplot of (log x, log y) shows a strong positive correlation Which of the following must be true? The variables x and y also have a correlation close to 1. A scatterplot of (x, y) shows a strong nonlinear pattern. The residual plot of the variables x and y shows a random pattern. I only II only III only I and II I, II, and III What is the purpose of residual plots? To determine causation. To assess the type of relationship that exists between x and y. To check the appropriateness and fit of the regression equation for the data. To measure the variability in the residuals. To provide predictions for the response variable.