Question: If we have omitted an important variable from our model, which of the following multiple linear regression (MLR) assumptions are violated? A. The errors for

If we have omitted an important variable from our model, which of the following multiple linear regression (MLR) assumptions are violated?

A. The errors for different observations have the same variance

B. None of the stated options

C. The errors for different observations are unrelated

D. The error term is unrelated with the regressor

Suppose the RESET test rejects its null hypothesis. What should you do?

A. Work with the unrestricted model that was estimated for the RESET test.

B. Search for appropriate nonlinear functions of the explanatory variables in the original model and add them as additional regressors.

C. Add to the model the squares and cubes of all explanatory variables in the original model

D. Continue with the original model you have

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