Consider the Multiple Regression Model with Two Regressors X₁ and X₂

question 53

Multiple Choice

Consider the multiple regression model with two regressors X₁ and X₂, where both variables are determinants of the dependent variable. You first regress Y on X₁ only and find no relationship. However when regressing Y on X₁ and X₂, the slope coefficient $\widehat { \beta 1 }$ changes by a large amount. This suggests that your first regression suffers from

• A)heteroskedasticity
• B)perfect multicollinearity
• C)omitted variable bias
• D)dummy variable trap

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Definitions:

Individual Deviants

Persons who act outside societal norms, which can include criminal behavior or non-conformity in non-criminal ways.

Urbanization

is the process by which cities grow and societies become more urban in character, often characterized by a decrease in rural population and an increase in urban living.

Economic Inequality

The unequal distribution of wealth, income, and economic resources among individuals, households, or communities within a society or globally.

Suicide Victim

An individual who has died as a result of intentionally ending their own life.