Suppose You Are Interested in Modeling the Amount of Money

Multiple Choice

Suppose you are interested in modeling the amount of money a household spends for a house.We would expect income to be a determining factor.In addition,the income tax rate for a household might be important since there are tax advantages to home ownership.If you were to run a regression of home purchase price on income and marginal tax rate,your results might be subject to:

A) multicollinearity.
B) heteroscedasticity.
C) specification bias.
D) autocorrelation.