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Beginning researchers quite often believe that they have multicollinearity when they've accidentally included in their equation two or more explanatory variables that basically serve the
Beginning researchers quite often believe that they have multicollinearity when they've accidentally included in their equation two or more explanatory variables that basically serve the same purpose or are, in essence, measuring the same thing. Which of the following pairs of variables are likely to include such a redundant variable? a. GDP and NDP in a macroeconomic equation of some sort b. the price of refrigerators and the price of washing machines in a durable goods demand function c. the number of acres harvested and the amount of seed used in an agricultural supply function d. long-term interest rates and the money supply in an investment function
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