The R² of a Multiple Regression of Y on X₁

question 44

Multiple Choice

The R² of a multiple regression of y on x₁ and x₂ measures the __________.

• A) percent variability of y that is explained by the variability of x₁
• B) percent variability of y that is explained by the variability of x₂
• C) statistical significance of the coefficients in the regression equation
• D) percent variability of y that is explained by the variability of x₁ and x₂

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Definitions:

Permanent Differences

These are differences between taxable income and accounting income that will not reverse in future periods.

Interperiod Income Tax Allocation

The process of allocating income taxes over various accounting periods because of temporary differences that cause taxable income to differ from accounting income.

Deferred Tax

An accounting concept referring to a temporary difference between the tax expense shown in the income statement and the tax payable to the tax authorities, due to timing or methodological differences in recognizing revenue and expenses.

Income Tax Expense

The amount of money that a company or individual owes to the government based on their taxable income.