Which of the Following Is Not a Possible Indicator of Multicollinearity

question 57

Multiple Choice

Which of the following is not a possible indicator of multicollinearity?

• A) non-random patterns in the plot of the residuals versus the fitted values
• B) significant correlations between pairs of independent variables
• C) non-significant t-tests for individual β parameters when the F-test for overall model adequacy is significant
• D) signs opposite from what is expected in the estimated β parameters

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Definitions:

Public Choice

A field of economics that applies economic methods to the study of political and administrative decision-making.

Bureaucratic Waste

Inefficiencies and wasted resources resulting from the cumbersome procedures, redundant paperwork, and unnecessary red tape often associated with large administrative systems.

Budget Allocation

The process of distributing available resources or finances among various projects or departments within an organization or government.

Government Agency

An organization operated by the government, focusing on specific tasks and duties in public service or regulation.