What Is the 'Omitted Variable' Problem in Determining Cause and Effect

question 139

Multiple Choice

What is the 'omitted variable' problem in determining cause and effect?

• A)It is a problem that arises when an insignificant variable is given too much weight in an economic analysis, leading to skewed conclusions about cause and effect.
• B)It is a problem that arises when a significant variable is not given enough weight in an economic analysis, leading to skewed conclusions about cause and effect.
• C)It is a problem that arises when an insignificant economic variable that should have been omitted is included in an economic analysis, leading to false conclusions about cause and effect.
• D)It is a problem that arises when an economic variable that affects other variables is omitted from an analysis, and its omission leads to false conclusions about cause and effect.

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Definitions:

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