When You Add State Fixed Effects to a Simple Regression

question 7

Multiple Choice

When you add state fixed effects to a simple regression model for U.S.states over a certain time period,and the regression R2 increases significantly,then it is safe to assume that

• A)the included explanatory variables,other than the state fixed effects,are unimportant.
• B)state fixed effects account for a large amount of the variation in the data.
• C)the coefficients on the other included explanatory variables will not change.
• D)time fixed effects are unimportant.

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Definitions:

Frequency of Customer Sales Calls

The number of times sales representatives contact or visit customers within a specific period to drive sales.

Nonselling Time

Periods in a salesperson's schedule not directly involved in selling activities, such as administrative tasks and travel.

Revenue Generated

The total amount of money produced from the sale of goods or services before any costs or expenses are subtracted.

Segment Accounts

The process of dividing a company's customer accounts into groups or segments based on shared characteristics to tailor marketing or sales efforts.