Twenty-one executives in a large corporation were randomly selected for a study in which several factors were examined to determine their effect on annual salary (expressed in $000's). The factors selected were age, seniority, years of college, number of company divisions they had been exposed to and the level of their responsibility. A regression analysis was performed using a popular spreadsheet program with the following regression output: What is the effect on salary for an increase of one level of responsibility if the other variables are held constant?
A) +$3,554
B) -$3,554
C) +$833
D) +$8330

Question

Twenty-one executives in a large corporation were randomly selected for a study in which several factors were examined to determine their effect on annual salary (expressed in $000's). The factors selected were age, seniority, years of college, number of company divisions they had been exposed to and the level of their responsibility. A regression analysis was performed using a popular spreadsheet program with the following regression output:  What is the effect on salary for an increase of one level of responsibility if the other variables are held constant?
A) +$3,554 
B) -$3,554 
C) +$833 
D) +$8330

Quizplus · Accepted Answer

According to the regression output, the coefficient for the variable "responsibility level" is 3.554. This means that for every increase in one level of responsibility, the salary increases by $3,554, holding all other variables constant. Therefore, the correct answer is A.

Twenty-One Executives in a Large Corporation Were Randomly Selected for a Study