Consider the Following to Answer the Question(s) Below

question 17

Multiple Choice

Consider the following to answer the question(s) below:
A sample of 30 companies was randomly selected for a study investigating what factors affect the size of company bonuses. Data were collected on the number of employees at the company and whether or not the employees were unionized (1 = yes, 0 = no) . The following multiple regression model was fit to the data.
-What does the scatterplot of these data (shown below) suggest?

• A) Using the interaction term Employees×Union rather than the indicator variable Union in the model might be more appropriate.
• B) The intersection of the line confirms that using Union as an indicator variable in this model is appropriate.
• C) The intersection of the line suggests that Union should not be included in the model as a variable.
• D) The intersection of the line suggests that Employees should not be included in the model as a variable.
• E) Using the interaction term Employees×Union in the model is definitely inappropriate.

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