Consider the Following to Answer the Question(s) Below

question 16

Multiple Choice

Consider the following to answer the question(s) below:
An alternative multiple regression model is fit to the data on the sample of firms selected from the high tech industry (Industry = 1) and the financial services sector (Industry = 0) . The results are shown below.
-What does the scatterplot of these data (shown below) suggest?

• A) Using Job Growth as an indicator variable in this model is appropriate.
• B) Using the interaction term Job Growth×Industry in the model is appropriate.
• C) Using Industry as an indicator variable in this model is appropriate.
• D) Job Growth should not be included in the model as a variable.
• E) Using Industry as an indicator variable in this model is definitely not appropriate.

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Definitions:

Operating Costs

Expenses associated with the day-to-day operation of a business, excluding financing costs and taxes.

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose, affecting its depreciation.

Machine

Equipment or apparatus designed to perform a specific task in the manufacturing process.

Present Value

The immediate worth of anticipated money or streams of cash flows, computed with an agreed-upon rate of return.