What Is the Purpose of an Indicator Variable in a Regression

question 12

Multiple Choice

What is the purpose of an indicator variable in a regression model?

• A)An indicator variable allows us to increase our R-squared value.
• B)An indicator variable allows us to include quantitative variables in our model.
• C)An indicator variable allows us to fix violations of our constant variance assumption.
• D)An indicator variable allows us to fix violations of our normality assumption.
• E)An indicator variable allows us to include categorical variables in our model.

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Definitions:

Self-directed Work Teams

Teams composed of members who collectively manage their work and make the decisions traditionally handled by their supervisor.

Downsizing

The process of reducing the size of a company's workforce to cut costs or improve efficiency, often resulting in layoffs.

Employee Turnover

Refers to the rate at which employees leave a company and are replaced by new ones.

Constructive Dismissal

A situation where an employee resigns due to the employer creating a hostile or unbearable work environment, effectively forcing the resignation.