If you are planning on running the regression model given by Tenure_i = β₀ + β₁Salary_i + β₂Years of Education_i + U_i, which of the following situations would cause this model to have a limited dependent variable? A) No one in the company earns more $130,000 a year. B) Everyone in the company earns at least $65,000 a year. C) No one can have negative years of education. D) No one can have negative tenure at the company.

Question

Quizplus · Accepted Answer

A limited dependent variable model is one where the dependent variable is constrained in some way. In this case, tenure cannot be negative, which imposes a limit on the dependent variable.

If You Are Planning on Running the Regression Model Given