What Are the Consequences of Using Least Squares When Heteroskedasticity

question 3

Multiple Choice

What are the consequences of using least squares when heteroskedasticity is present?

• A)no consequences,coefficient estimates are still unbiased
• B)confidence intervals and hypothesis testing are inaccurate due to inflated standard errors
• C)all coefficient estimates are biased for variables correlated with the error term
• D)it requires very large sample sizes to get efficient estimates

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Definitions:

Deceptive Tactics

Involves the employment of strategies designed to mislead, trick, or manipulate others for a perceived benefit.

Withholding Information

The act of intentionally not sharing relevant or necessary information with others who might benefit from knowing it.

Bluffing

A strategic deception or misrepresentation intended to make others believe something is true when it is not.

Mutual Benefit

A situation or action that is advantageous to all parties involved.