Question: 14.45. True or false? (a) Adjusted R2 can possibly decrease when an explanatory variable is added to a regression model. (b) Possible effects of an

14.45. True or false?

(a) Adjusted R2 can possibly decrease when an explanatory variable is added to a regression model.

(b) Possible effects of an influential observation include changing a correlation from positive to negative, a P-value from 0.01 to 0.99, and R2 from 0.01 to 0.99.

(c) When multicollinearity exists, one can still obtain good estimates of regression parameters, but R2 may be adversely affected.

(d) If y = annual medical expenses relates to x = age by E(y) = 1400 − 22x + 0.4x2, then the change in the mean of y for every unit change in x equals −22.

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