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When a Dummy Variable Is Included in a Multiple Regression

question 169

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When a dummy variable is included in a multiple regression model,the interpretation of the estimated slope coefficient does not make any sense anymore.


Definitions:

Developing Countries

Countries with a low living standard because of less human and physical capital per worker; typified by high rates of illiteracy, high unemployment, high fertility rates, and exports of primary products; also known as low-income and middle-income economies

Physical Capital

The stock of equipment, buildings, vehicles, and machinery that is used to produce goods and services; a factor of production that is not consumed in the production process.

Labor Productivity

The output per worker, assessing how efficiently labor is utilized in production.

Technology Quality

Technology quality refers to the degree of excellence, reliability, and performance of technological products or systems.

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