Suppose That You Observed Several Key Characteristics of a Random

Multiple Choice

Suppose that you observed several key characteristics of a random sample of firms in your industry. You know that the semi-partial correlation of firm Productivity (Y) with R&D (Z) investment holding amount of Labor (X) fixed is positive. Furthermore, suppose you know that the covariance of R&D investment and amount of labor is positive. How will the coefficient on Labor when you run the regression of Productivity on Labor and R&D investment relate to the coefficient on Labor when you run a regression of Productivity on just Labor?

A) It'll be equal to
B) It'll be greater than
C) It'll be less than
D) There is not enough information to determine.