Which of the following statements about the coefficient of determination (R²) is correct? A) R²is a measure of economic plausibility. B) The higher the R², the more confident we are when using a regression model to predict costs. C) R²is a measure of data accuracy. D) R²is a useful measure only for simple regressions.

Question

Quizplus · Accepted Answer

The coefficient of determination, also known as R-squared, measures the proportion of the variance in the dependent variable that is explained by the independent variable(s). A higher coefficient of determination indicates a stronger relationship between the variables, which increases our confidence in the regression model's ability to predict costs. Therefore, choice B is correct. Choices A, C, and D are incorrect because R² does not measure economic plausibility, data accuracy, or usefulness only for simple regressions.

Which of the Following Statements About the Coefficient of Determination