If X₂ is a binary predictor in Y = β₀ + β₁X₁ + β₂X₂, then which statement is most nearly correct? A)X₂ = 1 should represent the most desirable condition. B)X₂ would be a significant predictor if β₂ = 423.72. C)X₂ = 0, X₂ = 1, X₂ = 2 would be appropriate if three categories exist. D)X₂ will shift the estimated equation either by 0 units or by β₂ units.

Question

Quizplus · Accepted Answer

X₂ is a binary predictor, meaning it can only take on two values: 0 or 1. Thus, option C is incorrect as it suggests a third value of 2. Option A is incorrect because there is no information to suggest that a value of 1 for X₂ is the most desirable condition. Option B is incorrect because the value of β₂ does not determine whether X₂ is a significant predictor or not. Option D is correct because if X₂ is 0, then there is no shift in the estimated equation. If X₂ is 1, then the estimated equation is shifted by the value of β₂.

If X2 Is a Binary Predictor in Y = β0

If X₂ Is a Binary Predictor in Y = β₀