Multicollinearity Exists When Which of the Following Conditions Is Present

question 219

Multiple Choice

Multicollinearity exists when which of the following conditions is present?

• A)At least two variables change due to changes in the cost driver.
• B)There are at least two cost pools (usually separated for fixed and variable costs).
• C)The underlying value of the coefficient can only be explained in relation to dependent variables.
• D)There are two or more statistically significant observations of at least two independent variables.
• E)Two or more independent variables are highly correlated with each other.

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Definitions:

Efficiently

Efficiency in an economic context signifies achieving maximum productivity with minimum wasted effort or expense.

Marginal Cost

Is the increase in total cost that arises from producing one additional unit of a good or service.

Ruthlessly Efficient

Operating with extreme efficiency, often at the expense of other considerations such as employee welfare or ethical considerations.

Recognizable Brand Name

A brand name that is widely known among the public and is easily recalled or recognized due to its reputation or marketing.