Refer to the information provided in Table 22.3 below to answer the question(s) that follow.
Table 22.3
$$\begin{array} { | c | c | c | }
\hline \text { Point } & \begin{array} { c }
\text { Aggregate } \
\text { Income } ( \boldsymbol { Y } )
\end{array} & \begin{array} { l }
\text { Aggregate } \
\text { Consumption } ( \boldsymbol { C } )
\end{array} \
\hline \boldsymbol { A } & 15 & 19 \
\hline \boldsymbol { B } & 30 & 23 \
\hline C & 45 & 27 \
\hline D & 60 & 31 \
\hline E & 75 & 35 \
\hline F & 90 & 39 \
\hline
\end{array}$$ The data in the table was used to estimate the following consumption function: C = 20 + 0.2Y
-Refer to Table 22.3. Which of the following points is (are) the worst fit for the given consumption function?
A) A
B) D and F
C) E
D) F

Question

Refer to the information provided in Table 22.3 below to answer the question(s) that follow.
Table 22.3
 $$\begin{array} { | c | c | c | } 
\hline \text { Point } & \begin{array} { c } 
\text { Aggregate } \
\text { Income } ( \boldsymbol { Y } )
\end{array} & \begin{array} { l } 
\text { Aggregate } \
\text { Consumption } ( \boldsymbol { C } )
\end{array} \
\hline \boldsymbol { A } & 15 & 19 \
\hline \boldsymbol { B } & 30 & 23 \
\hline C & 45 & 27 \
\hline D & 60 & 31 \
\hline E & 75 & 35 \
\hline F & 90 & 39 \
\hline
\end{array}$$ The data in the table was used to estimate the following consumption function: C = 20 + 0.2Y
-Refer to Table 22.3. Which of the following points is (are) the worst fit for the given consumption function?
A) A
B) D and F
C) E
D) F

Quizplus · Accepted Answer

BTo determine the worst fit for the given consumption function $C = 20 + 0.2Y$, we calculate the predicted consumption ($C$) for each point and compare it to the actual consumption provided in the table. The points with the largest difference between actual and predicted consumption are considered the worst fit.- For point A: Predicted $C = 20 + 0.2(15) = 23$. Actual is 19. Difference = 4.- For point B: Predicted $C = 20 + 0.2(30) = 26$. Actual is 23. Difference = 3.- For point C: Predicted $C = 20 + 0.2(45) = 29$. Actual is 27. Difference = 2.- For point D: Predicted $C = 20 + 0.2(60) = 32$. Actual is 31. Difference = 1.- For point E: Predicted $C = 20 + 0.2(75) = 35$. Actual is 35. Difference = 0.- For point F: Predicted $C = 20 + 0.2(90) = 38$. Actual is 39. Difference = 1.Point A has the largest difference (4), making it the worst fit. Points D and F have the next largest differences (1), but since the question asks for the worst fit(s) and point A has a larger discrepancy than any other point, it is the primary incorrect fit. However, if considering all points that do not perfectly fit, D and F would also be considered, albeit with much smaller discrepancies.

Refer to the Information Provided in Table 22 The Data in the Table Was Used to Estimate the Answer