Which of the Following Statements Is True of Spurious Regressions

question 25

Multiple Choice

Which of the following statements is true of spurious regressions?

• A)The OLS estimates of the population parameters are efficient and unbiased and the t statistic is valid.
• B)Even if the explanatory variables and the dependent variable are independent times series processes, the R² can be large.
• C)Spurious regressions are limited to I(0) processes, and are not possible in case of I(1) processes.
• D)Spurious regressions are limited to I(1) processes, and are not possible in case of I(0) processes.

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Definitions:

Maximum Persuasion

The use of communication skills and techniques to their fullest extent to influence or convince others of a particular viewpoint, decision, or action.

Deductive Pattern

A logical process in which a conclusion is reached by applying a general principle or rule to specific instances or cases.

Good News

Information or announcements that are positive, uplifting, or beneficial to the receiver, often leading to a pleasant or optimistic reaction.

Bad-news Message

Communication that conveys disappointing, unfavorable, or negative information to the recipient.