In general,to represent a nominal independent variable that has m possible categories,we must create:
A)(m + 1)indicator variables.
B)m indicator variables.
C)(m− 1)indicator variables.
D)(m− 2)indicator variables.

Question

Quizplus · Accepted Answer

To represent a nominal independent variable with m categories, (m - 1) indicator variables (also known as dummy variables) are needed. This is because one category can be inferred if all the other (m - 1) categories are known, thus avoiding the dummy variable trap and multicollinearity issues.

In General,to Represent a Nominal Independent Variable That Has M