A matrix giving the correlation (r) for each pair of independent variables is shown above. Identify the independent variables that are highly correlated. What problems may result from including these highly correlated variables in the regression model?

For Information: Refer to Exercise 12.146.

xIn(level of CO2 emissions in 1980) Independent Variable x;2 xa x4 xs x6 xi # In( foreign investments in 1980) .x2 gross domestic investment in 1980 13 57 30 38 14 49 36 47 -14 43-4706 84 53 -45 -.14 25 -,07 42 -50 -47 = trade exports in 1980 In(GNP in 1980) agricultural production in 1980 1 if African country, 0 if not