If an Additional Explanatory Variable Was Added to the Model

question 18

Multiple Choice

If an additional explanatory variable was added to the model, what would happen to R2?

• A) It would stay the same or increase.
• B) It would always increase.
• C) It would decrease.
• D) It would stay the same or decrease.
• E) The effect cannot be determined from this information.

---

Definitions:

Price of Curds

The market price at which curds, a dairy product obtained by coagulating milk, are bought and sold.

Price of Whey

Refers to the market value assigned to whey, a by-product of cheese or casein production that is used in food and supplements.

Income

The money received by an individual or household, typically on a regular basis, through work, investments, or other sources.

Utility Function

A mathematical representation of how different combinations of goods or levels of consumption affect an individual's level of satisfaction or happiness.