Demand for Cars and Income Level Regression | CFA® Level 1 Exam | Test Prep

Demand for Cars

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Question

A financial economist runs the following regression: Demand for cars = alpha + beta*income level + error In this regression, the demand for cars is ________ variable and the income level is ________ variable.

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A. B. C. D.

B

The left-hand side variable is the dependent variable since its behavior in the equation is being explained by the right-hand side variable, which is the independent variable. Note, however, that this does not imply any kind of causal relationship in general.

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