Which of the Following Statements Is True When the Dependent

question 9

Multiple Choice

Which of the following statements is true when the dependent variable, y > 0?

• A)Taking log of a variable often expands its range.
• B)Models using log(y) as the dependent variable will satisfy CLM assumptions more closely than models using the level of y.
• C)Taking log of variables make OLS estimates more sensitive to extreme values.
• D)Taking logarithmic form of variables make the slope coefficients more responsive to rescaling.

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Definitions:

Regression Model

A mathematical model that estimates the relationship between a dependent variable and one or more independent variables.

Independent Variables

Elements in a research or modeling scenario that are deliberately modified to examine their influence on variables that are affected by them.

Stepwise Regression

A method of regression analysis that involves adding or removing predictors based on their statistical significance in a step-by-step manner to identify a model with optimal predictors.

P-values

A measure in statistical hypothesis tests representing the probability of observing the given or more extreme results assuming the null hypothesis is true.