Consider the Multiple Regression Model with Two Regressors X1 and X2,where

question 55

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 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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Nominal GDP

The total economic value of all finished products and services generated inside a country over a year, evaluated at present market prices.

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Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in a given year, expressed in constant prices.

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The aggregate amount of money expended by individuals, businesses, and governments on goods and services within a certain period.

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The total amount of products, including goods and services, produced by a company or country within a specified period.