Why Is R² a Commonly Used and Perhaps Better Measure

question 5

Multiple Choice

Why is R² a commonly used and perhaps better measure of how well a regression model fit the data than the residual sum of squares (RSS) ?

• A) The RSS is often too large
• B) The RSS does not depend on the scale of the dependent variable whereas the R² does
• C) The RSS depends on the scale of the dependent variable whereas the R² does not
• D) The RSS depends on the scale of the independent variable whereas the R² does not

---

Definitions:

False Consensus

A cognitive bias where an individual overestimates the extent to which their beliefs, values, or opinions are shared by others.

Recession

A significant decline in economic activity across the economy, lasting more than a few months, typically visible in real GDP, income, employment, industrial production, and wholesale-retail sales.

Store-Wide Sale

A promotional event where discounts are offered on most or all items within a store.

Superiors

Individuals in higher positions or ranks within an organization, with authority or managerial responsibility over others.