Which of the Following Is True of R²

question 26

Multiple Choice

Which of the following is true of R²?

• A)R² is also called the standard error of regression.
• B)A low R² indicates that the Ordinary Least Squares line fits the data well.
• C)R² usually decreases with an increase in the number of independent variables in a regression.
• D)R² shows what percentage of the total variation in the dependent variable, Y, is explained by the explanatory variables.

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Definitions:

Complements

Goods or services that are often used together so that the consumption of one increases the demand for the other.

Inferior Good

A type of good for which demand decreases as the consumer's income increases.

Tuna Fish Sandwiches

A type of sandwich made typically from canned tuna mixed with mayonnaise and other ingredients.

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, inversely related to that of 'normal goods'.