In multiple linear regression analysis,the number of independent variables should be
A)more than 5.
B)guided by economic theory.
C)enough to guarantee that statistical significance is achieved.
D)as large as possible.

Question

Quizplus · Accepted Answer

The number of independent variables should be guided by economic theory. Including too many independent variables may result in overfitting the model, which means that the model may fit the sample data too closely, reducing its usefulness for making predictions about new observations. Therefore, it is important to have a theoretical foundation for selecting the independent variables that are included in the regression model.

In Multiple Linear Regression Analysis,the Number of Independent Variables Should