The Method Used in Regression Analysis for Incorporating a Categorical

question 5

True/False

The method used in regression analysis for incorporating a categorical variable into the model is by organizing the categorical variable into one or more dummy variables.

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Definitions:

Tax

A compulsory financial charge or other levy imposed by a government on individuals or businesses to fund various public expenditures.

Binding Price Floor

A legal minimum price for a good or service that is set above the equilibrium price, resulting in surpluses.

Binding Price Ceiling

A government-imposed limit on how high a price can be charged for a product, set below the market equilibrium price, leading to shortages.

Decreases

A reduction in size, quantity, or degree; the opposite of increases.