You Have to Worry About Perfect Multicollinearity in the Multiple

question 20

Multiple Choice

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.

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