In using the multiple regression method,we can model the effects of the different levels of a qualitative independent variable by using a(n)____________.
A)Interaction variable
B)Cross-product term
C)Quadratic term
D)Dummy (indicator)variable
E)Variance equalizing transformation

Question

Quizplus · Accepted Answer

Dummy (indicator) variables are used to model the effects of different levels of a qualitative independent variable in multiple regression analysis. The use of indicator variables allows us to include categorical variables in the regression model as continuous variables, thereby enabling us to estimate the effect of each level of the variable relative to a reference level.

In Using the Multiple Regression Method,we Can Model the Effects