Reading 11- LOS E (Part 2): Q2 style, equation, following, 2008, class

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2.In the estimated regression equation Y = 0.78 - 1.5 X, which of the following is least accurate when interpreting the slope coefficient?

A)   If the value of X is zero, the value of Y will be -1.5.

B)   The dependent variable declines by -1.5 units if X increases by 1 unit.

C)   The dependent variable increases by 1.5 units if X decreases by 1 unit.

D)   -1.5 is the elasticity of Y with respect to X.

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The correct answer was A)

The slope represents the change in the dependent variable for a one-unit change in the independent variable. If the value of X is zero, the value of Y will be equal to the intercept, in this case, 0.78.