When Selecting Explanatory Variables to Include in a Regression

question 27

Multiple Choice

When selecting explanatory variables to include in a regression,

• A)you should pick all observable variables available.
• B)you should pick all observable variables that are likely to have a meaningful impact on the dependent variable.
• C)ignore all variables that have t-statistics less than the critical value.
• D)ignore variables that have an R² less than 1.

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Definitions:

Defense Industries

Sector of the economy dedicated to producing weapons, military technology, and supplies for armed forces.

Brigadier General

A military rank that is above a Colonel and below a Major General in the armies of various countries.

Presidential Election

A formal decision-making process by which a country's citizens choose the President, the head of the state government.

1940

A year marked by the ongoing events of World War II, including significant global military engagements.