In Lieu of Including a Separate Dummy Variable for Each

question 5

Multiple Choice

In lieu of including a separate dummy variable for each different time period of a panel, often times the use of a simple time trend is chosen. This choice will lead to a(n) :

• A) increase in the r-squared.
• B) increase in the adjusted r-squared.
• C) increase in the number of parameters to be estimated.
• D) decrease in the number of parameters to be estimated.

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