Question

QUESTION 18

1. As independent variables are added to a multiple regression equation, the coefficient of determination, R², never decreases.

   	a.	True
   	b.	False

Answer 1

Question 18:

R² increases with every independent variable or predictor added to the model . As the coefficient of determination, R^2,  always increases and never decreases, it can appear to be a better fit with the more terms you add to the model. This can be completely misleading. R² assumes that every single variable explains the variation in the dependent variable.

The correct option is option a which is true.

A misleading high R^2 can lead to misleading projections.

The adjusted R^2 decreases if the variables which are added to the equation does not seem to explain the variation in the dependent variable very well.