When Your Multiple Regression Function Includes a Single Omitted Variable

question 16

Multiple Choice

When your multiple regression function includes a single omitted variable regressor, then

• A)use a two-sided alternative hypothesis to check the influence of all included variables.
• B)the estimator for your included regressors will be biased if at least one of the included variables is correlated with the omitted variable.
• C)the estimator for your included regressors will always be biased.
• D)lower the critical value to 1.645 from 1.96 in a two-sided alternative hypothesis to test the significance of the coefficients of the included variables.

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A situation where a country's imports exceed its exports over a given period, leading to more money leaving the country than coming in.

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