A Multiple Regression Model Includes the Term (X₁)(X₂)

question 91

Multiple Choice

A multiple regression model includes the term (X₁) (X₂) . If the hypothesis is that the term's regression coefficient is NOT rejected, what is a valid conclusion?

• A) The independent variables are correlated.
• B) There is only one independent variable in the regression model.
• C) The effect of X₁ on the dependent variable is independent of the value of X₂.
• D) The effect of X₁ on the dependent variable depends on the value of X₂.

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Definitions:

Markup Percentage

A ratio that shows how much a product’s selling price exceeds its cost, expressed as a percentage of the cost.

Variable Cost

Costs that vary directly with the level of production or service activity.

Contribution Margin

The difference between the sales revenue of a product and its variable costs.

Machine Time

The scheduled or actual time that a machine is set to operate or is operating, usually relating to production processes.