In 1975 Tuition at Wattsomata University Was $2,500 and the Consumer

question 88

Multiple Choice

In 1975 tuition at Wattsomata University was $2,500 and the consumer price index was 80.In 2011 tuition was $12,000 and the price index was 320.Which of the following is correct?

• A)Nominal and real tuition were both higher in 1975.
• B)Nominal and real tuition were both higher in 2011.
• C)Nominal tuition was higher in 1975,real tuition was higher in 2011.
• D)Nominal tuition was higher in 2011,real tuition was higher in 1975.

Understand the concept of nominal variables and their representation by indicator (dummy) variables.

Recognize when to use indicator variables in multiple regression models.

Identify the appropriate number of indicator variables for nominal variables with various categories.

Interpret the role and effect of indicator variables in regression analysis and model prediction.

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