A Proxy Variable _____

question 3

Multiple Choice

A proxy variable _____.

• A)increases the error variance of a regression model
• B)cannot contain binary information
• C)is used when data on a key independent variable is unavailable
• D)is detected by running the Davidson-MacKinnon test

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.

Double-Entry Bookkeeping

Process by which accounting transactions are entered; each individual transaction always has an offsetting transaction.

Owner's Equity

The residual interest in the assets of a business after deducting its liabilities, representing the owners' share of the company's resources.

Liabilities

Financial obligations or debts that a company or individual owes, which must be settled over time.