Economics · Econometrics
In a regression model with high but imperfect multicollinearity: 1. The variance of OLS estimators increases. 2. Individual t-statistics may become insignificant despite a high R2. 3. OLS estimators become biased. 4. The model necessarily suffers from specification error. Choose the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11 and 3 only
- 22 and 4 only
- 31, 2 and 3 only
- 41 and 2 only✓
Correct answer
1 and 2 only
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