A decision maker is considering including two additional variables into a regression model that has as the dependent variable, Total Sales. The first additional variable is the region of the country (North, South, East, or West) in which the company is located. The second variable is the type of business (Manufacturing, Financial, Information Services, or Other). Given this, how many additional variables will be incorporated into the model?
If a decision maker wishes to develop a regression model in which the University Class Standing is a categorical variable with 5 possible levels of response, then he will need to include how many dummy variables?