A model is based on an assumption that an additional year of education increases a student's future wage by 20 percent.
-Refer to the scenario above.Which of the following statements is true about the model's prediction?
A) The prediction cannot be verified empirically.
B) The prediction is precise, exact, and accurate for the entire population.
C) The prediction is an approximate relationship and may not hold for everyone.
D) The prediction can be applied to estimate the returns only for a limited number of years of additional education.

Question

Quizplus · Accepted Answer

The statement mentions that the model is based on an assumption, which means it is not a precise, exact, or accurate relationship for the entire population. Additionally, the model's prediction is an approximate relationship and may not hold true for everyone. Therefore, option C is the correct answer. Option A is not correct as the prediction can be verified empirically. Option B is not correct because the model's prediction is not precise or accurate for everyone. Option D is not relevant to the given scenario as there is no mention of limitations on estimating the returns for a limited number of years of additional education.

A Model Is Based on an Assumption That an Additional