In regression models,multicollinearity arises when the:
A)dependent variables are highly correlated with one another.
B)independent variables are highly correlated with one another.
C)independent variables are highly correlated with the dependent variable.
D)error terms do not have the same variance.

Question

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Multicollinearity occurs when independent variables are highly correlated with one another. This can lead to problems in the model, such as difficulty in determining the individual effects of each independent variable on the dependent variable, and higher standard errors for the coefficients.

In Regression Models,multicollinearity Arises When The