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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Quizplus · Accepted Answer

This statement is true. The adjusted R² takes into account the number of variables in the regression equation, and adjusts for the potential inflation of the R² due to including more variables. If the absolute value of the t statistic of the new variable is greater than one, this suggests that the variable has a statistically significant effect on the dependent variable and therefore can provide additional explanatory power to the regression equation, leading to an increase in the adjusted R².

If a New Independent Variable Is Added to a Regression