To Include a Nominal Variable in the Regression Model We

question 17

Multiple Choice

To include a nominal variable in the regression model we need to transform it into:

• A)the intercept
• B)an indicator variable
• C)an interaction term
• D)a polynomial term

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Definitions:

Purely Competitive

An idealized market structure in which there are many buyers and sellers, no barriers to entry or exit, and perfect information, leading to prices being determined by supply and demand.

Market Supply Curve

A graphical representation showing the total quantity of a good that sellers are willing and able to sell at various prices, holding all else constant.

Purely Competitive

A market structure characterized by a large number of small firms producing similar products, with easy entry and exit from the market, leading to price-taking behavior.

New Firms

New firms refer to businesses that have been recently established and are in the early stages of their operational life.