As a Project for His Business Statistics Class,a Student Examined $\beta$

question 31

Multiple Choice

As a project for his business statistics class,a student examined the factors that determined parking meter rates throughout the campus area.Data were collected for the price per hour of parking,blocks to the quadrangle,and one of the three jurisdictions: on campus,in downtown and off campus,or outside of downtown and off campus.The population regression model hypothesized is Y_i = $\beta$ ₀ + $\beta$ ₁ X_1i + $\beta$ ₂ X _2i + $\beta$ ₃ X_3i + $\varepsilon$
Where
Y is the meter price
X₁ is the number of blocks to the quad
X₂ is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise
X₃ is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus,and the value 0 otherwise
Suppose that whether the meter is located on campus is an important explanatory factor.Why should the variable that depicts this attribute not be included in the model?

• A)Its inclusion will introduce autocorrelation.
• B)Its inclusion will introduce collinearity.
• C)Its inclusion will inflate the standard errors of the estimated coefficients.
• D)Both (b)and (c).

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Definitions:

Spanish Oppression

Historical period of dominance and harsh control by Spain over its colonies and various indigenous peoples.

American Indians

The indigenous peoples of the Americas, often referred to as Native Americans, with diverse cultures, histories, and nations present before and after European colonization.

Jesuits

Members of the Society of Jesus, a Roman Catholic order of priests and brothers founded in the 16th century, known for their educational, missionary, and charitable works.

Columbian Exchange

The widespread transfer of plants, animals, culture, human populations, technology, and ideas between the Americas and the Old World in the 15th and 16th centuries, following Christopher Columbus's 1492 voyage.