Which of the following statements are correct?
I. The fact that a coefficient is statistically significant necessarily means it is economically significant as well.
II. Multicollinearity is a violation of No perfect collinearity assumption. (MLR.3)
a. Only I
b. Only II
c. Both I and II
d. Neither I nor II
If the data is precisely estimated then the Statistically significant coefficient has be to Economically significant
Economically significant | Economically insignificant | |
Precisely estimated | Statistically significant | May be statistically significant |
Imprecisely estimated | May be statistically insignificant | Statistically insignificant |
Multicollinearity is a problem of correlation among the independent variable
I. The fact that a coefficient is statistically significant necessarily means it is economically significant as well.
II. Multicollinearity is a violation of No perfect collinearity assumption.
c. Both I and II correct
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