Under Imperfect Multicollinearity

question 63

Multiple Choice

Under imperfect multicollinearity

• A)the OLS estimator cannot be computed.
• B)two or more of the regressors are highly correlated.
• C)the OLS estimator is biased even in samples of n > 100.
• D)the error terms are highly, but not perfectly, correlated.

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Definitions:

Utilization

The extent to which an entity (e.g., equipment, workforce) is being used efficiently to produce goods or services.

Efficiency

The ratio of the output produced to the input resources used in the production process, indicating the effectiveness of resource utilization.

Effective Capacity

The maximum output rate or service capacity an operation, process, or facility can be expected to achieve under normal conditions.

Design Capacity

The maximum output or performance level that a facility or product is engineered to achieve under ideal conditions.