If an Independent Variable Is Added to a Multiple Regression

question 85

Multiple Choice

If an independent variable is added to a multiple regression model, the R² value​

• A) ​becomes larger or smaller depending on the statistical significance of the variable.
• B) ​becomes larger even if the variable added is not statistically significant.
• C) ​might or might not become larger even if the variable added is statistically significant.
• D) is not affected by the variable added even if it is statistically significant.

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Definitions:

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, typically measured on a yearly basis.

Accountants

Professionals who perform financial functions related to the collection, accuracy, recording, analysis, and presentation of a business, organization, or individual's financial operations.

Tax Code

The system of laws and regulations that govern the levying of taxes on individuals, businesses, and other entities, which outlines the rates, exemptions, and enforcement policies.

Real Incomes

Income of individuals or nations adjusted for inflation, reflecting the purchasing power of the income.