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The regression analysis below relates the value of new car sales (in millions of dollars) and the independent variables compensation (in billions of dollars) and

The regression analysis below relates the value of new car sales (in millions of dollars) and the independent variables "compensation" (in billions of dollars) and "employment level in the non-agricultural sector" (in thousands) for 44 consecutive quarter. Compare this multiple regression to the simple regressions with compensation and employment level as the respective independent variables.Which of the following is the likely culprit of the dramatic increase in the p-value for employment level in the multiple regression?

  • Multicollinearity
  • Heteroskedasticity
  • Nonlinearity
  • None of the above

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