Multiple Choice
In a case where there is multicollinearity in the model
A) Independent variables have strong linear relationships with each other
B) The variance of the estimates increases when we have multicollinearity.
C) Multicollinearity will lead to bias.
D) Both A and B
E) Both A and C
Correct Answer:
Verified
Correct Answer:
Verified
Q11: Explain the omitted variable bias problem, and
Q12: Adding more control variables will always increase
Q13: Which of the following are associated with
Q14: We necessarily do not have an omitted
Q15: Adding more independent variables can reduce multicollinearity.
Q16: What should we do when we have
Q17: Explain the challenges in the model specification
Q18: Measurement error in the dependent variable causes
Q19: Which of the following are consequences of
Q21: Adding more independent variables into the model