Multicollinearity exists when
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4 marks, −1EconometricsClassical assumptions and their violationsMulticollinearityModerateabout 1 min
CUET-PG 2020 Question 75: Classical assumptions and their violations
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Multicollinearity exists when (A) Independent variables are correlated less than -0.70 or more than 0.70 (B) An independent variable is strongly correlated with a dependent variable (C) There is only one independent variable (D) The relationship between the dependent and independent variable is non-linear
Classical assumptions and their violations has come up 26 times in 7 exams since 2011.
What this question tests
This question is on Multicollinearity, part of Classical assumptions and their violations in Econometrics.
Highly correlated regressors: symptoms, consequences and the perfect case.
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