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For This Question, Use the California Testscore Data Set and Your

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For this question, use the California Testscore Data Set and your regression package (a spreadsheet program if necessary). First perform a multiple regression of testscores on a constant, the student-teacher ratio, and the percent of English learners. Record the coefficients. Next, do the following three step procedure instead: first, regress the testscore on a constant and the percent of English learners. Calculate the residuals and store them under the name res YX2 . Second, regress the student-teacher ratio on a constant and the percent of English learners. Calculate the residuals from this regression and store these under the name resXIX2. Finally regress resYX2 on resXIX2 (and a constant, if you wish). Explain intuitively why the simple regression coefficient in the last regression is identical to the regression coefficient on the student-teacher ratio in the multiple regression.

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Definitions:

Total Sales Revenue

The total income generated from selling goods or services before any expenses are subtracted.

Selling Price

The amount of money for which a product or service is sold to the customer, including all applicable costs and markup.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs.

Break-Even Point

The financial point at which total costs and total revenue are equal, resulting in no net loss or gain.

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