R2 of a regression equation
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When the R2 of a regression equation is very high, it indicates that:
All the coefficients are statistically significant.
The intercept term has no economic meaning.
A high proportion of the variation in the dependent variable can be accounted for by the variation in the independent variables.
There is a good chance of serial correlation and so the equation must be discarded.
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Solution Summary
The solution determines what is the R2's role.
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