Even Though Insignificant Explanatory Variables Can Raise the Adjusted R²

question 22

Multiple Choice

Even though insignificant explanatory variables can raise the adjusted R² of a demand function,one should not interpret their effects on the regression when

• A) testing marketing hypotheses about the determinants of demand
• B) analyzing inventory relative to capacity requirements
• C) forecasting unit sales for operations planning
• D) sales revenue reaches its peak
• E) planning for capital budgets

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Definitions:

Somatic

Relating to or affecting the body, especially as distinct from the mind or emotions.

Motor

Relating to the movement or mechanism of physical actions and coordination in organisms.

Central

Serving as the most important or core part of something.

Efferent

Referring to nerve fibers that carry impulses away from the central nervous system to effectors (such as muscles or glands).