Including irrelevant independent variables into the model:
A) Will create bias
B) Will reduce the precision of our estimates.
C) Will have no negative or positive effect
D) Will lead to an increase in the error term.

Question

Quizplus · Accepted Answer

Including irrelevant independent variables into the model will increase the number of parameters to be estimated, hence reducing the precision of our estimates. It may also make the model more complex without improving its predictive power. However, it does not necessarily create bias or lead to an increase in the error term.

Including Irrelevant Independent Variables into the Model