If a categorical independent variable contains 4 categories,then _____ dummy variable(s)will be needed to uniquely represent these categories.
A)1
B)2
C)3
D)4

Question

Quizplus · Accepted Answer

If a categorical independent variable contains 4 categories, then we need to create 3 dummy variables to uniquely represent these categories. This is known as dummy variable trap, in which we create one less dummy variable than the total number of categories. This allows us to avoid issues with multicollinearity in regression models.

If a Categorical Independent Variable Contains 4 Categories,then _____ Dummy