By Including Another Variable in the Regression, You Will

question 42

Multiple Choice

By including another variable in the regression, you will

• A)decrease the regression R² if that variable is important.
• B)eliminate the possibility of omitted variable bias from excluding that variable.
• C)look at the t-statistic of the coefficient of that variable and include the variable only if the coefficient is statistically significant at the 1% level.
• D)decrease the variance of the estimator of the coefficients of interest.

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