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You Can Limit the Problem of Potential Spurious Correlation by

Question 7

Multiple Choice

You can limit the problem of potential spurious correlation by


A) estimating the regression both with and without the suspect independent variable and comparing the R-squared for the two regressions.
B) thinking carefully about the chose model specification to rule out potential spurious correlations.
C) including interaction terms between the suspect independent variable and the remaining independent variables and testing for the joint significance of those terms.
D) including a dummy variable for the suspect independent variable and testing for the individual significance of that term.

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