If a New Independent Variable Is Added to a Regression

question 1

True/False

If a new independent variable is added to a regression equation, the adjusted R² increases only if the absolute value of the t statistic of the new variable is greater than one.

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Definitions:

Purely Competitive Industries

Markets characterized by many buyers and sellers, homogeneous products, and free entry and exit, leading to price-taking behavior.

Cut-Throat Competition

Intense competition where competitors use aggressive tactics to undercut each other’s prices and gain market share.

Consumer Demand

The desire by consumers to purchase goods and services, quantified by the amount of a product people are willing to buy at certain price levels.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a stable market condition.