Suppose You're Running a Multiple Regression of Home Prices on Five

question 50

Multiple Choice

Suppose you're running a multiple regression of Home Prices on five different treatment variables including number of bedrooms, number of bathrooms, total square feet, total lot size, and garage size, where all the treatment variables have been standardized . Which conditions about the multiple regression must hold?

• A) Correlation between each of the treatment variables equals 0.
• B) Correlation between each of the treatment variables equals 1.
• C) Intercept for the multiple linear regression equals the sample average home price.
• D) Correlation between the residuals and home price equals 0.

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Definitions:

Manufacturing Overhead

All manufacturing costs except direct labor and direct materials, including maintenance and utilities.

Direct Labor Cost

The wages and benefits paid to workers who are directly involved in the production of goods or the provision of services.

Work in Process Inventory

Goods that are in the midst of production and not yet complete at the conclusion of an accounting cycle.

Direct Labor-Hours

The aggregate amount of time spent by staff members who are directly part of the production activity.