variable residual terms
smaller residual terms
larger residual terms
zero residual terms
Answer is Right!
Answer is Wrong!
The correct answer is: B. smaller residual terms.
Residual terms are the differences between the actual values and the estimated values. A better fit between estimated cost and actual observations is represented by smaller residual terms. This means that the estimated values are closer to the actual values.
A. Variable residual terms do not necessarily indicate a better fit. In fact, variable residual terms can be a sign of a poor fit.
C. Larger residual terms indicate a worse fit. This is because the estimated values are further away from the actual values.
D. Zero residual terms indicate a perfect fit. However, this is not always possible, as there will always be some error in any estimate.