You have to worry about perfect multicollinearity in the multiple regression model because
A) many economic variables are perfectly correlated.
B) the OLS estimator is no longer BLUE.
C) the OLS estimator cannot be computed in this situation.
D) in real life, economic variables change together all the time.
Answer: C
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Which of the following tools is used to compare the income per capita across countries?
A) Purchasing power parity B) The headcount index C) The GDP deflator D) Production possibilities frontier
When economists describe "a market," they mean:
a. A hypothetical place where the production of goods and services takes place b. Information networks that allow individuals to keep in touch with each other c. A mechanism which coordinates actions of consumers and producers to establish equilibrium prices and quantities d. A place where stocks and bonds are traded
Which of the following is not a solution to the problem of negative externalities due to pollution?
A. Create private property rights. B. Levy pollution taxes. C. Create obligatory controls. D. Reward the production of these products through subsidies.
Nuclear power in the United States turned out to be
A. a boon to the economy. B. well worth the time and investment. C. a hazard-free source of limitless power. D. far more expensive and troublesome than expected.