SCENARIO 15-6 Given Below Are Results from the Regression Analysis on 40

question 27

True/False

SCENARIO 15-6
Given below are results from the regression analysis on 40 observations where the dependent variable is the number of weeks a worker is unemployed due to a layoff (Y)and the independent variables are the age of the worker (X₁),the number of years of education received (X₂),the number of years at the previous job (X₃),a dummy variable for marital status (X₄: 1 = married,0 = otherwise),a dummy variable for head of household (X₅: 1 = yes,0 = no)and a dummy variable for management position (X₆: 1 = yes,0 = no).
The coefficient of multiple determination ( R ²_j )for the regression model using each of the 6 variables X _j as the dependent variable and all other X variables as independent variables are,respectively,
0.2628,0.1240,0.2404,0.3510,0.3342 and 0.0993.
The partial results from best-subset regression are given below:

-Referring to Scenario 15-6,the variable X₂ should be dropped to remove collinearity?

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Definitions:

Input

Resources such as labor, materials, and capital used in the production of goods and services.

Backward-Bending

Refers to a labor supply curve that bends backwards at higher wage rates, indicating that higher wages can lead to less labor supplied due to increased leisure preference.

Substitution Effect

A change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Income Effect

The alteration in a person's or an economy's earnings and its effect on the amount of a good or service they want to purchase.