A regression of Y using four independent variables X₁, X₂, X₃, X₄ could also have up to four nonlinear terms (X²) and six simple interaction terms (X_jX_k) if you have enough observations to justify them.

Question

Quizplus · Accepted Answer

The statement is true. A regression model can have up to four nonlinear terms and six simple interaction terms, but it is important to ensure that there are sufficient observations to support their inclusion.

A Regression of Y Using Four Independent Variables X1, X2

A Regression of Y Using Four Independent Variables X₁, X₂