Which of the Following Is True of R²

question 26

Multiple Choice

Which of the following is true of R²?

• A)R² is also called the standard error of regression.
• B)A low R² indicates that the Ordinary Least Squares line fits the data well.
• C)R² usually decreases with an increase in the number of independent variables in a regression.
• D)R² shows what percentage of the total variation in the dependent variable, Y, is explained by the explanatory variables.

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Definitions:

Imperfectly Competitive

A market structure where individual sellers have some control over the market price due to product differentiation or other factors.

Purely Competitive

A market structure with many sellers offering identical products, leading to no individual influence on price by single sellers.

Marginal Product

The additional output produced as a result of adding one more unit of a specific input, holding all other inputs constant.

Resource

A source or supply from which a benefit is produced and that has some utility, which can include natural resources, human resources, and capital.