5 Questions
What are the consequences of positively autocorrelated error terms in a regression model?
Estimated regression coefficients are still unbiased, but may be quite inefficient.
What is a major cause of positively autocorrelated error terms in business and economic regression applications involving time series data?
Omission of one or several key variables from the model.
What is the term used to describe error terms that are correlated over time in time series data?
Autocorrelated
What assumption about error terms is often not appropriate for business and economic regression applications involving time series data?
Uncorrelated or independent error terms
What test is commonly used to detect the presence of autocorrelation in the error terms of a regression model?
Durbin-Watson Test
Test your knowledge of autocorrelation in time series data with this quiz. Explore the problems of autocorrelation, the first-order autoregressive error model, the Durbin-Watson test, and remedial measures to address autocorrelation issues. Delve into the complexities of regression models and their assumptions in business and economics.
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