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The statistical significance of changes to R2 depends on the size of R2. In both examples, consider the benefit of adding three explanatory variables to a regression that already contains two explanatory variables. Assume that the regression is fit to n = 50 observations.

(a) Is an increase from 10% to 12% statistically sig- nificant? Explain.

(b) Is an increase from 90% to 92% statistically sig- nificant? Explain.

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