Please explain why these statements are true false or uncertain, thank you very
ID: 3180553 • Letter: P
Question
Please explain why these statements are true false or uncertain, thank you very much!
Are the following statements True, False or Uncertain. You will also need to justify your answer. (Please keep your justifications brief. Approximately half a page each should be more than sufficient) (a) For the purpose of modelling the main determinants of unemployment duration (time spent unemployed) it would be preferable to have gathered data from a sample of workers who were recently unemployed but are now back at work rather than from a sample of workers who are currently unemployed and so the duration of their unemployment spell would be unknown. (b) In the Multiple Linear Regression model, standard errors are inflated by multicollinearity.Explanation / Answer
a. FALSE. for the purpose of modelling the main determinats of unemployment duration which is time spent unemployed it should be to have gathered information from the sample of workers who are still unemployed .information like how long they have staying unemployed,what was the reason behind,what alternative work they were doing or reason behind their unemployment can lead to better insights.
b.TRUE the more correlated the variables are with each other, the bigger the standard errors will be ,this is called multicollinearity.The more highly correlated independent variables are, the more difficult it is to determine how much variation in Y each X is responsible for.