Whenever a Categorical Variable Such as Season Has K Levels,the

question 25

Multiple Choice

Whenever a categorical variable such as season has k levels,the number of dummy variables required is

• A)k - 1.
• B)k.
• C)k + 1.
• D)2k.

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Definitions:

Real Output

The total value of all goods and services produced in an economy, adjusted for price changes or inflation.

Relative-price Variability

The fluctuation in prices of goods and services relative to each other over time, often influenced by various economic factors.

Misallocation

The inefficient distribution or use of resources, often leading to suboptimal economic outcomes.

Nominal Gain

The increase in the monetary value of an asset or investment without adjusting for inflation, representing a simple difference in price.