Autocorrelation may be the result of
A) the omission of an important explanatory variable.
B) the presence of a trend in the independent variable.
C) nonlinearities in the relationship between the dependent and independent variables.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

Autocorrelation can occur due to various reasons, including the omission of an important variable (which can lead to specification bias), the presence of a trend in the data (which can cause serial correlation), and nonlinear relationships between variables (which linear models might not capture accurately). Therefore, all the options listed are correct causes of autocorrelation.

Autocorrelation May Be the Result of