Your textbook plots the estimated regression function produced by the probit regression of deny on P/I ratio The estimated probit regression function has a stretched "S" shape given that the coefficient on the P/I ratio is positive. Consider a probit regression function with a negative coefficient. The shape would
A) resemble an inverted "S" shape (for low values of X, the predicted probability of Y would approach 1)
B) not exist since probabilities cannot be negative
C) remain the "S" shape as with a positive slope coefficient
D) would have to be estimated with a logit function
Answer: A) resemble an inverted "S" shape (for low values of X, the predicted probability of Y would approach 1)
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A) aggregate demand shifting to the left. B) a movement up along the aggregate demand curve. C) a movement down along the aggregate demand curve. D) aggregate demand shifting to the right.
The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information
Indicate whether the statement is true or false