Card 134 / 180: The figure below shows a plot of the residuals from a linear regression. Notice the residual marked A. Which of the following best describes what this residual reveals about the fitted regression line?
A)
Residual A represents a negative outlier in the sample, which results in the slope being over-estimated (it is larger than the true relationship between x and y).
B)
Residual A represents a negative outlier in the sample, which results in the slope being under-estimated (it is smaller than the true relationship between x and y).
C)
Residual A represents an outlier in the sample, which results in the line of best fit.
D)
Residual A represents an observation in the sample, which results in the line of best fit.
Answer:
A) Residual A represents a negative outlier in the sample, which results in the slope being over-estimated (it is larger than the true relationship between x and y).
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