How much variance should be explained in factor analysis?
Variance explained by factor analysis must not maximum of 100% but it should not be less than 60%. It should not be less than 60%. If the variance explained is 35%, it shows the data is not useful, and may need to revisit measures, and even the data collection process.
How do you explain total variance explained?
The Total column gives the eigenvalue, or amount of variance in the original variables accounted for by each component. The % of Variance column gives the ratio, expressed as a percentage, of the variance accounted for by each component to the total variance in all of the variables.
What causes the AD and AS curves to shift?
Shifting the Aggregate Demand Curve The aggregate demand curve tends to shift to the left when total consumer spending declines. Consumers might spend less because the cost of living is rising or because government taxes have increased. Contractionary fiscal policy can also shift aggregate demand to the left.
What is considered a good variance?
As a rule of thumb, a CV >= 1 indicates a relatively high variation, while a CV < 1 can be considered low. This means that distributions with a coefficient of variation higher than 1 are considered to be high variance whereas those with a CV lower than 1 are considered to be low-variance.
What is variance explained variance?
Explained variance (also called explained variation) is used to measure the discrepancy between a model and actual data. In other words, it’s the part of the model’s total variance that is explained by factors that are actually present and isn’t due to error variance.
Why does ad slope downwards?
It slopes downward because of the wealth effect on consumption, the interest rate effect on investment, and the international trade effect on net exports. The aggregate demand curve shifts when the quantity of real GDP demanded at each price level changes.
What shifts the AS curve?
In the long run, the most important factor shifting the AS curve is productivity growth. A higher level of productivity shifts the AS curve to the right, because with improved productivity, firms can produce a greater quantity of output at every price level.
What is the AD curve?
The aggregate demand curve represents the total quantity of all goods (and services) demanded by the economy at different price levels. The vertical axis represents the price level of all final goods and services.
What causes the AD curve to shift to the right?
Aggregate demand shifters include each of the components of the output expenditure formula for GDP. Anything that would increase Consumption, Gross Investment, Government Purchases, or Net Exports will shift the AD curve to the right. A reduction in any of these will cause the AD curve to shift left.
How does the money supply affect the AD curve?
Federal Reserve actions in the Money Market, serve to shift the AD Curve (mostly the Gross Investment portion) through changes in the interest rate. Increases in the money supply reduce interest rates and shift AD right. Decreases in the money supply raise interest rates and shift AD left.
How are prices measured on an aggregate demand curve?
Aggregate Demand (AD) Curve. The vertical axis represents the price level of all final goods and services. The aggregate price level is measured by either the GDP deflator or the CPI. The horizontal axis represents the real quantity of all goods and services purchased as measured by the level of real GDP.
How is the SAS curve related to the supply curve?
The SAS curve—depicted in Figure (a)—is therefore upward sloping, reflecting the positive relationship that exists between the price level and the quantity of goods supplied in the short‐run. Long‐run aggregate supply curve. The long‐run aggregate supply (LAS) curve describes the economy’s supply schedule in the long‐run.