The Regression Model for an observed value of Y contains the term which represents the Y axis intercept when X = 0.

Question

Options

• ATrue
• BFalse

• A
  70% (35)
• B
  30% (15)

Explanation

Option A is correct because in a simple linear regression model Y = β₀ + β₁X + ε, the term β₀ (the intercept) represents the predicted value of Y when X equals zero - geometrically, this is exactly where the regression line crosses the Y-axis. This is a fundamental component of the regression equation, not an optional or derived term. Option B is wrong because it would imply the intercept term either doesn't exist in the model or doesn't represent the Y-axis intercept at X = 0, both of which contradict the definition of β₀.

Memory tip: Think of β₀ as the "baseline" - it's where your line starts on the Y-axis before X has any influence (i.e., when X = 0). The subscript 0 in β₀ is a reminder: plug in X = 0 and only β₀ remains.

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