Question: Let us consider a multiple linear regression equation of the type: i 0 1 1i 2 2i 3 3i i y = ???? +????X +????

Let us consider a multiple linear regression equation of the type:

i 0 1 1i 2 2i 3 3i i y = ???? +????X +???? X +???? X +????

What problems can happen if we apply the OLS method to estimate the parameters when 2 X and 3 X are linearly related to each other? Justify.

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