Which of the Following Is True of Regression Specification Error

question 17

Multiple Choice

Which of the following is true of Regression Specification Error Test (RESET) ?

• A)It tests if the functional form of a regression model is misspecified.
• B)It detects the presence of dummy variables in a regression model.
• C)It helps in the detection of heteroskedasticity when the functional form of the model is correctly specified.
• D)It helps in the detection of multicollinearity among the independent variables in a regression model.

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Definitions:

Numerical Accuracy

The degree to which the result of a computation conforms to the correct value, affected by various factors including floating-point representation and algorithmic design.

Arguments

Arguments are values that are passed to a function, procedure, or command to customize its execution.

Variables

Elements in programming that are used to store data that can be changed during the execution of a program.

Function Name

The identifier given to a block of code that can be executed in a program, allowing for the segregation and reuse of code.