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Chapter 21. A dependent variable is also known as a(n) _____.a. explanatory variableb. control variablec. predictor variabled. response variableAnswer: dDifficulty: EasyBloom’s: KnowledgeAHead: Definition of the Simple Regression ModelBUSPROG: Feedback: A dependent variable is known as a response variable.2. If a change in variable x causes a change in variable y, variable x is called the _____. a. dependent variableb. explained variablec. explanatory variabled. response variableAnswer: cDifficulty: EasyBloom’s: ComprehensionAHead: Definition of the Simple Regression ModelBUSPROG: Feedback: If a change in variable x causes a change in variable y, variable x is called the independent variable or the explanatory variable.3. In the equation y = β0 + β1x + u, β0 is the _____.a. dependent variableb. independent variablec. slope parameterd. intercept parameterAnswer: dDifficulty: EasyBloom’s: KnowledgeAHead: Definition of the Simple Regression ModelBUSPROG: Feedback: In the equation y = β0 + β1x + u, β0 is the intercept parameter.4. In the equation y = β0 + β1x + u, what is the estimated value of β0?a. y β1 xb. y+β1xc. i=1n(xix)(yiy)i=1n(xi)2d. i=1nxyAnswer: aDifficulty: EasyBloom’s: KnowledgeAHead: Deriving the Ordinary Least Squares EstimatesBUSPROG: Feedback: The estimated value of β0 is y β1 x.5. In the equation c = β0 + β1i + u, c denotes consumption and i denotes ine. What is the residual for the 5th observation if c5=$500 and c5=$475?a. $975b. $300c. $25d. $50Answer: cDifficulty: EasyBloom’s: KnowledgeAHead: Deriving the Ordinary Least Squares EstimatesBUSPROG: Feedback: