Question 1) Which of the following can cause the usual OLS t statistics to be invalid (that is, not to have t distribu- tions under HO)? (i) Heteroskedasticity. (ii) A sample correlation coefficient of 95 between two independent variables that are in the model. (iii) Omitting an important explanatory variable Question 2)Which of the following can cause OLS estimators to be biased? (i) Heteroskedasticity. (ii) Omitting an important variable. (iii) A sample correlation coefficient of .95 between two independent variables both included in the model.

Question 1) Which of the following can cause the usual OLS t statistics to be invalid (that is, not to have t distribu- tions under HO)? (i) Heteroskedasticity. (ii) A sample correlation coefficient of 95 between two independent variables that are in the model. (iii) Omitting an important explanatory variable Question 2)Which of the following can cause OLS estimators to be biased? (i) Heteroskedasticity. (ii) Omitting an important variable. (iii) A sample correlation coefficient of .95 between two independent variables both included in the model.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4A: Problems In Applying The Linear Regression Model

Section: Chapter Questions

Problem 5E

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7 Which of the following can cause OLS estimators to be biased? (i) Heteroskedasticity. (ii) Omitting an important variable. (iii) A sample correlation coefficient of 95 between two independent variables both included in the model.
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